4. Sectoral shifts, frictional unemployment, and job searches The Suppose the wo

Question

4. Sectoral shifts, frictional unemployment, and job searches The Suppose the world price of steel falls substantially. The demand for labor among steel-producing firms in Pennsylvania will demand for labor among automobile-producing firms in Michigan, for which steel is an input, will resulting from such sectoral shifts in the economy is best described as The temporary unemployment unemployment. Suppose the government wants to reduce this type of unemployment. Which of the following policies would help achieve this goal? Check all that apply. Offering recipients of unemployment insurance benefits a cash bonus if they find a new job within a specified number of weeks Establishing government-run employment agencies to connect unemployed workers to job vacancies Extending the number of weeks for which unemployed workers are eligible for unemployment insurance benefits from the government

Explanation / Answer

Suppose the world price of steel fall susbstantially. The demand for labor among tell producing firms in Pennysylvania will decrease. The demand for labour among automobile producing firms in Michigan, for which steel is an input, will increase. The temporary unemployment resulting from such sectoral shifts in the economy is best described as frictional unemployment.

Suppose the government wants to reduce this type of unemployment. Policies that would help achieve the goal is

b) Establishing government run employment agencies to connect unemployed workers to job vacancies.

This would be helpful as it would provide information to the unemployed labourers outside their field and job openings.

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