Successful Labor Market Performers: Germany and Denmark (2010-2019)

An economist is comparing the labor market performance of four different high-income countries over the last decade. Based on the data presented below, which country best fits the definition of a 'successful' economy that delivers both low unemployment and rising real wages?

Evaluating Labor Market Performance

Defining Economic Success

According to the definition used in comparative macroeconomics, an economy can be classified as 'successful' if it achieves an extremely low unemployment rate, even if this comes at the cost of stagnant real wages for its population.

Match each economic scenario with the description that best characterizes its labor market performance.

Analyzing Labor Market Success

An economy has successfully lowered its unemployment rate to a 20-year low. However, during the same period, the average worker's ability to purchase goods and services with their income has not increased. Why would this economy not be considered 'successful' in the context of labor market performance?

Rationale for Labor Market Success Metrics

A country's government implements a new economic policy. After five years, the unemployment rate has fallen from 10% to 4%. During this same period, average nominal wages increased by 8%, while the overall price level for goods and services increased by 10%. Based on these outcomes, how would you classify this country's labor market performance?

Evaluating a Claim of Economic Success