Question

Which scenario could you use as an example of frictional unemployment when explaining it to a friend?

a. George has a difference of opinion with his boss and the friction grows over time until his boss finds a few mistakes that George has made and fires him.

b. A college student working at a copy center finishes his semester of school and quits his job at the copy center and goes traveling through South America for the summer.

c. An economics professor living and working in California accepts a new position at a college in New Jersey. She takes two months after finishing her current work to wrap things up and move out East.

_______ is the idea that firms will get the most for their money when they pay wages higher than the equilibrium wage.

a. Optimal-wage theory

b. Equilibrium-wage theory

c. Efficiency-wage theory

During the 1990s worker productivity growth spiked as computers and the internet were introduced to many businesses for the first time. How did this affect the natural unemployment rate?

a. Natural unemployment increased as computers replaced workers.

b. Natural unemployment was unaffected.

b. Natural unemployment decreased as productivity growth outstripped wage growth.

Answer 1

Q1. Option c.Frictional unemployment is the time spent between jobs when an person transits from one job to another

Q2. Option c.

Q3. Option c. With the introduction of computer, per person productivity increased which reduced natural unemployment rate