A recession may alter an economy's natural rate of unemployment in all of the following ways except by:
A) changing an unemployed individual's attitude toward work.
B) reducing an unemployed worker's job skills.
C) permanently reducing the money supply.
D) altering the wage-setting process.

Question

Quizplus · Accepted Answer

A recession can affect an economy's natural rate of unemployment by changing an individual's attitude toward work, reducing job skills, and altering the wage-setting process. However, it cannot permanently reduce the money supply. The money supply is determined by the central bank and fiscal policy decisions of the government, which are not directly affected by a recession.

A Recession May Alter an Economy's Natural Rate of Unemployment