Answer to Question #227092 in Macroeconomics for KAT

Question

Distinguish between voluntary and involuntary unemployment. Do

you consider the former a social problem requiring public policy? 

Answer 1

Voluntary unemployment is a situation where people who have the ability to work are not willing to work but there are suitable and appropriate work available to them.

Involuntary unemployment is a situation where there is no work for people who are able and willing to work at the prevailing payment.

Voluntary unemployment can be considered a social problem since people who are able to work may be demoralized or lack motivation to work.