Non-market-clearing theories of the labour market feature ________ wages,and thus involuntary unemployment ________.

Question

Quizplus · Accepted Answer

Non-market-clearing theories of the labour market feature sticky wages, meaning they do not adjust immediately to changes in demand and supply. This leads to a situation where there may be involuntary unemployment, as the labour market is unable to clear. Therefore, option D, sticky wages and involuntary unemployment can exist together, is the correct choice.

Non-Market-Clearing Theories of the Labour Market Feature ________ Wages,and Thus