When unemployment is low, employers will tend to reduce the prices of their products.

Question

Quizplus · Accepted Answer

When unemployment is low, employers may actually increase the prices of their products as they are competing for a smaller pool of workers and may need to offer higher wages and benefits, leading to higher production costs. Additionally, when unemployment is low, consumers may have more disposable income and be willing to pay higher prices.

When Unemployment Is Low, Employers Will Tend to Reduce the Prices