Answer to Question #136134 in Macroeconomics for Valerie

Question

Choose the correct answer
In the short run, unemployment may decrease if…
[1] real wages increase.
[2] population growth decline.
[3] investment increase.
[4] interest rate increase.

Answer 1

1) Real wages increase.

This is in the case where people are unemployed because they are not willing or ready to work at the current equilibrium wage.

But would accept to work at a higher wage. Hence real wage increase would make them accept to work therefore becoming employed.

But still this group of people doesn't represent the majority of the unemployed