Long-term unemployment rates are higher in most Western European countries than in the United States because
A) unemployment rates are calculated differently in Western Europe.
B) nonmarket forces keep wages in Western Europe above the equilibrium level.
C) technological change has accelerated more quickly in Western Europe.
D) most Western European governments hire workers to perform jobs that are not in demand.

Question

Quizplus · Accepted Answer

Nonmarket forces such as strong labor unions and government regulations lead to higher wages in Western Europe, which keeps them above the equilibrium level and makes it harder for employers to hire workers. This ultimately contributes to higher long-term unemployment rates.

Long-Term Unemployment Rates Are Higher in Most Western European Countries