When output increases by 1%, the unemployment rate does not tend to fall by 1% in the short run because

Question

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All the options provided are reasons why the unemployment rate does not fall by 1% when output increases by 1%. Firms may increase hours worked per job (A), the increase in employment may not match the number of new jobs due to various factors (B), and the labor force may expand as output increases (C), all contributing to the unemployment rate not decreasing proportionally with an increase in output.

When Output Increases by 1%, the Unemployment Rate Does Not