Wages in excess of their equilibrium level help explain
A)frictional but not structural unemployment.
B)structural but not frictional unemployment.
C)frictional and structural unemployment.
D)neither frictional or structural unemployment.

Question

Quizplus · Accepted Answer

Wages in excess of their equilibrium level are caused by structural factors, such as minimum wage laws or labor unions, which create a surplus of labor and lead to unemployment. This is distinct from frictional unemployment, which is caused by temporary factors such as job search or geographic mobility. Therefore, wages in excess of their equilibrium level help explain structural but not frictional unemployment.

Wages in Excess of Their Equilibrium Level Help Explain