The macro consequence of unemployment is
A)Lost output for the economy.
B)Lost income for the individual worker.
C)A leftward shift in the production possibilities curve.
D)A 1 percent decrease in GDP for every 1 percent decrease in unemployment.

Question

Quizplus · Accepted Answer

Unemployment leads to lost output for the economy as there are fewer people working and producing goods and services. This results in a decrease in the overall productivity of the country and can lead to a decrease in GDP. Option B is a micro consequence of unemployment as it only affects individual workers, while option C is incorrect as unemployment does not impact the production possibilities curve. Option D is also not correct as there is not necessarily a direct correlation between decreases in unemployment and decreases in GDP: sometimes a decrease in unemployment can lead to an increase in GDP if it leads to an increase in consumer spending and confidence.

The Macro Consequence of Unemployment Is