Attempts

$1\mathrm{.}3$

$1\mathrm{.}3$

Average $\frac{1\mathrm{.}3}{2}$

$4.$ Sectoral shifts, frictional unemployment, and job searches

Suppose the world price of steel rises substantially. The demand for labour among steel$-$producing firms in Northern Ontario will decrease $x.$ The demand for labour among automobile$-$producing firms in Southern Ontario, for which steel is an input, wil X$.$ The temporary unemployment resulting from such sectoral shifts in the economy is best described as $q,$

$q,$ unemployment.

Points:

$$

$\frac{0\mathrm{.}33}{1}$

Explanation: ${\displaystyle \underset{\phantom{}}{\overset{\phantom{}}{}}}lm$

Close Explanation

Frictional unemployment often results from changes in the demand for labour among firms. When the world price of steel rises, steel$-$producing firms will find it more profitable to produce steel. As steel$-$producing firms increase production, the demand for labour with which to produce steel increases. Job opportunities in Northern Ontario expand. For automobile$-$producing firms, the increase in the world price of steel increases production costs. As automobile$-$producing firms decrease production, the demand for labour in Southern Ontario decreases. Job opportunities in Southern Ontario contract. Workers laid off in one sector will take time to find new positions in an expanding sector. These types of sectoral shifts occur continuously in a dynamic economy, so there will always be some level of frictional 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.

$$ Improving a widely used job search website so that it matches workers to job vacancies more effectively

$$ Taxing the price of placing a resume or posting a job opening on a job$-$search website

$$ Increasing the benefits offered to unemployed workers through the government's Employment Insurance program