Question

Assume an economy is incurring unemployment. The effect of resolving this problem will be to:

Answer 1

Answer:

The correct answer is option A.

Explanation:

Unemployment in the economy can be reduced by increasing the level of output. To produce more the firms or producers will need more inputs. So, an increase in the output will lead to an increase in the demand for workers.  

As the labor demand curve shifts to the right, the number of workers employed will increase. In this way, unemployment can be reduced.