The economy needs some unemployment to operate efficiently, because without it
A) firms will find it difficult to recruit workers, leading to increased wages and prices.
B) firms will find it difficult to recruit workers, leading to reduced wages and prices.
C) workers will find it difficult to find a job, leading to increased wages and prices.
D) workers will find it difficult to find a job, leading to reduced wages and prices.

Question

Quizplus · Accepted Answer

When there is no unemployment, firms struggle to find available workers, which can lead to increased wages as they compete for employees. This increase in wages can then lead to higher prices for goods and services as firms pass on the cost to consumers.

The Economy Needs Some Unemployment to Operate Efficiently, Because Without