Classical unemployment can be caused by which of the following?

Question

Quizplus · Accepted Answer

Minimum wage laws, bargaining by unions, and efficiency wages all contribute to classical unemployment. Minimum wage laws can lead to higher wages than the market equilibrium, causing firms to employ fewer workers, resulting in unemployment. Bargaining by unions can lead to higher wages, making firms less inclined to hire workers, leading to unemployment. Efficiency wages involve paying workers more than the market equilibrium to increase productivity, leading to unemployment for those who cannot meet the higher productivity standards. Thus, all of these choices create classical unemployment.

Classical Unemployment Can Be Caused by Which of the Following