Which of the following does not create unemployment by keeping wages above the equilibrium level?
A)efficiency wages
B)job search
C)minimum-wage laws
D)unions

Question

Quizplus · Accepted Answer

Efficiency wages, minimum-wage laws, and unions all create unemployment by keeping wages above the equilibrium level, meaning that there are more workers available than there are jobs. In the case of efficiency wages, firms may choose to pay higher wages to increase worker productivity or reduce turnover, but this can result in fewer jobs available. Minimum-wage laws set a legal minimum wage that employers must pay, which can make some jobs no longer profitable to offer, leading to unemployment. Similarly, unions negotiate higher wages and benefits for their members, which can make it more difficult for non-union workers to find jobs. Job search, on the other hand, does not create unemployment by keeping wages above equilibrium. While workers may choose to hold out for a higher-paying job, this does not have an impact on the overall level of employment.

Which of the Following Does Not Create Unemployment by Keeping