Which of the following reasons does not contribute to a higher level of unemployment?

a)

a lack of labor mobility as people choose to remain in their hometown

b)

a reduction in union bargaining activities

c)

a reduction in economic activity due to a recession

d)

the existence of efficiency wages

Hi there!

The answer is A) A lack of labor mobility as people choose to remain in their hometown.

Unemployment is a complex issue, here are the reasons why the other options increase unemployment:

-Reduction in Union bargaining activities would increase unemployment because employers wouldn't have as many restrictions to reduce their workforce.

-Reduction in economic activity due to a recession would increase unemployment as the demand for products, and for workers too, will decrease.

-The existence of efficiency wages causes unemployment because the demand for labor will decrease, as employees get more and more efficient.

A lack of labor mobility as people choose to remain in their hometown will not contribute to a higher level of unemployment. Instead, labor mobility can increase unemployment because there would be an oversupply of labor in a specific region.