PPSCFPSCNTSPakistan govt jobs
- Subject
- Labour Marketeconomics-mcqs › labour-market
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
Explanation
This situation describes the downward multiplier effect, where an initial drop in demand triggers higher unemployment, which then lowers spending and further reduces demand, creating a reinforcing downward cycle.
More Labour Market MCQs
Practice related questions from the same subject.
- 1.How do unions typically contribute to widening the wage gap between union members and non-union workers?
- 2.Under which circumstance can unions enhance efficiency?
- 3.Which of the following reasons explains why companies might choose to pay efficiency wages?
- 4.Which of the following government actions is least likely to decrease the unemployment rate?
- 5.What happens if the wage rate is set above the competitive equilibrium wage for any reason?
- 6.What is the typical effect of a minimum wage law on employment levels?
- 7.Based on Figure 1, what is the unemployment rate?
- 8.Based on the UK Office of National Statistics, how is a husband classified if he stays at home to manage household duties?
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