In the long run,unusually high unemployment
A) indicates that an economy is operating above potential GDP
B) forces the wage rate down
C) eventually causes the aggregate supply curve to shift upward
D) pushes the price level upward
E) causes the aggregate demand curve to shift rightward

Question

Quizplus · Accepted Answer

High unemployment forces workers to compete for jobs, which pushes the wage rate down as there is an excess supply of labor. This is due to more workers than there are jobs available.

In the Long Run,unusually High Unemployment