Question

Policies that reduce the time it takes unemployed workers to find new jobsa. can reduce both frictional unemployment and the natural rate of unemployment.b. can reduce frictional unemployment, but they cannot reduce the natural rate of unemployment.c. cannot reduce frictional unemployment, but they can reduce the natural rate of unemployment.d. cannot reduce either frictional unemployment or the natural rate of unemployment.

Answer 1

The correct answer is option a.

Step-by-step explanation:

Frictional unemployment is the type of unemployment that exists when workers are shifting from one job to another. It is a temporary situation.

Policies that reduce the time taken by unemployed workers to find new jobs will help reduce frictional unemployment.

Since the natural rate of unemployment includes frictional unemployment, it will decline as well.