Involuntary Unemployment as a Feature of Sustainable Equilibrium

Assessing Economic Stability

An economy is described as being in a stable state where firms are setting prices and wages to maximize their profits, and workers are making the best employment choices they can, given the available opportunities. As a result, there is no general tendency for wages or prices to change. Which of the following conditions is also consistent with this description of a sustainable equilibrium?

In an economy considered to be in a sustainable equilibrium, where firms are maximizing profits and workers are choosing the best jobs available to them, the level of involuntary unemployment must be zero.

The Stability of Macroeconomic Equilibrium