Understanding Unemployment

There are three reasons for unemployment which are categorizes as frictional, structural, and cyclical unemployment.

Public policy seeks to minimize unemployment by providing information, training, facilities, and other programs to assist the unemployed.

If the labor market is competitive, unions will typically raise wages but increase unemployment.

Efficiency wage theory is the idea that firms may permanently hold to a real wage greater than the equilibrium wage.

Jobs are created when workers become more productive, the price of output increases, or when total economic output increases.