Question

Suppose the world price of steel falls substantially. The demand for labor among steel-producing firms in Pennsylvania will . The demand for labor among automobile-producing firms in Michigan, for which steel is an input, will . The temporary unemployment resulting from such sectoral shifts in the economy is best described as 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. Increasing the benefits offered to unemployed workers through the government's unemployment insurance program Establishing government-run employment agencies to connect unemployed workers to job vacancies Improving a widely used job-search website so that it matches workers to job vacancies more effectively

Answer 1

decrease; increase; frictional
(Suppy decreases so demand for labor in Pennsylvania decreases and demand for labor in automobile producing firms in Michigan increases. This creates frictional unemployment.)

Establishing government-run employment agencies to connect unemployed workers to job vacancies
Improving a widely used job-search website so that it matches workers to job vacancies more effectively
(Both of these will reduce frictional unemployment by connecting unemployed workers to appropriate jobs.)