Question

In: Economics

since unemployment is high, how this affect wage rates?

since unemployment is high, how this affect wage rates?

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Expert Solution

1. Unemployment:- Unemployment is situation which occurs when a person who in effectively searching for employment, but unable to find work. The most common measure of unemployment is the unemployment rate.

Formula --- unemployment rate = unemployed people/people in labour force

Wage Rates:- The amount of base wage pay to a worker per unit of time or output. It measures the basic remuneration per time unit.

Effect of Unemployment on Wage Rate:-

1. The outcome of the wage setting process across all firms in the economy, which shows the wage associated with each unemployment rate.

2. Wagea might be related to the unemployment rate and good business conditions improved.

3. When unemployment is high, the wage rates become lower.

4. Workers get lower wages according to their working standard.

5. Wage rates are cut down by companies or firms.

Rahul Sunny answered 1 year ago
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