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Economic Definition of involuntary unemployment. Defined.

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Term involuntary unemployment Definition: Unemployment that results when resources which are willing and able to engage in production are not because no one is buying the output they produce. From a macroeconomic perspective, involuntary unemployment results when aggregate demand is not sufficient to purchase all of the output produced by the resources. This is the primary problem of business-cycle contractions. The contrast to involuntary unemployment is voluntary unemployment.

 

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