Which one of the following types of unemployment results from the wage being held above the competitive equilibrium wage?
A) Structural unemployment
B) Cyclical unemployment
C) Frictional unemployment
D) None of these answers

Question

Quizplus · Accepted Answer

Structural unemployment occurs when there is a mismatch between the skills that workers in the labor force possess and the skills that employers demand. If the wage is held above the competitive equilibrium wage, it will cause a decrease in the quantity of labor demanded while increasing the quantity supplied. This creates a surplus of labor, which can lead to lay-offs and structural unemployment.

Which One of the Following Types of Unemployment Results from the Wage