Unions contribute to
A)frictional unemployment but not the natural rate of unemployment.
B)the natural rate of unemployment but not frictional unemployment.
C)both frictional unemployment and the natural rate of unemployment.
D)neither frictional unemployment nor the natural rate of unemployment.

Question

Quizplus · Accepted Answer

Unions can contribute to the natural rate of unemployment by negotiating for higher wages, which can lead to higher unemployment if companies cannot afford to hire as many workers. However, they do not directly contribute to frictional unemployment, which is the short-term unemployment that occurs when people are between jobs or entering the workforce.

Unions Contribute to