Multiple choice

What is classical unemployment?

  1. In which supply of labour exceeds demand for labour
  2. In which real wages are set above the market wages

  1. Only 1

  2. Only 2

  3. Both 1 and 2

  4. Neither 1 nor 2
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Classical or real wage unemployment occurs when real wages for a job are set above the market-clearing level, causing the number of job seekers to exceed the number of vacancies.

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