When the unemployment rate in an economy is very low, businesses have to ______ in order to attract highly skilled employees.

Question

Quizplus · Accepted Answer

When the unemployment rate is low, there is high demand for employees but low supply. This means that businesses need to offer higher salaries/wages to attract highly skilled employees and remain competitive in the labor market. If they offer lower salaries/wages, they may not be able to attract the best talent, which could hinder their productivity and growth. Cutting back on production is not necessarily a solution in this case, as businesses may need to produce more to meet customer demand. Doing nothing and waiting for the unemployment rate to go up is not proactive and may result in missed opportunities for growth and success.

When the Unemployment Rate in an Economy Is Very Low