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

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4. Sectoral shifts, frictional unemployment, and job searches Suppose the world price of cotton falls substantially. The demand for labor among cotton-producing firms in Texas will for labor among textile-producing firms in South Carolina, for which cotton is an input, will from such sectoral shifts in the economy is best described as The demand ·The temporary unemployment resulting 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. Establishing government-run employment agencies to connect unemployed workers to job vacancies -Offering recipients of unemployment insurance benefits a cash bonus if they find a new job within a specified number of weeks Increasing the benefits offered to unemployed workers through the government's unemployment insurance progranm Grade It Now Save & Continue Continue without saving

Explanation / Answer

Answer : Suppose the world price of cotton falls substantially. The demand for labour among cotton-producing firms in Texas will decrease . The demand for labour among textile-producing firms in South Carolina, for which cotton is an input, will increase. The temporary unemployment resulting from such sectoral shifts in the economy is best described as frictional unemployment.

If the government wants to reduce the frictional unemployment then the government should establishing government-run employment agencies to connect unemployed workers to job vacancies.

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