Question

why is unemployment fundamentally puzzle to economists?

why is unemployment fundamentally puzzle to economists?

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Answer #1

Unemployment is puzzling to economists as the largest number of people who remain to be unemployed are the people with lowest skills and these skills can find jobs easily in various market as the economy consists of jobs such as construction and labor which do not require high skilled labor force so these people being unemployed for a longer time is puzzling.Also hiring and firing cost for low skilled workforce seems to be high which should not be the case.Another case is when the total wage is increasing in the market but so does unemployment which makes it confusing as to whether economy is growing or going to slowdown.

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