Question

Unions contribute to Select one: 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.

Answer 1

Answer:

The correct answer is letter "C": both frictional unemployment and the natural rate of unemployment.

Explanation:

Natural unemployment is defined as the lowest rate of unemployment an economy will reach. It is called natural because its causes are other than an adverse economy. Natural unemployment is a combination of frictional unemployment -employment transitions, structural unemployment -mismatch between abilities and current position, and labor surplus.

Unions are groups of individuals who join to set minimum standards at work in regards to wages, compensations, and conditions. Union members are, by default, always available to join the workforce even if there is work to be done or not. Sometimes, union members are assigned duties their abilities outperform just to avoid having the member unemployed. These are the reasons why unions are said to contribute to natural unemployment.