Increasing the efficiency of various employment agencies to find better matches for those looking for jobs will
A) reduce the natural rate of unemployment.
B) reduce structural unemployment.
C) reduce cyclical unemployment.
D) not affect frictional unemployment.

Question

Quizplus · Accepted Answer

Increasing the efficiency of employment agencies to find better matches for those looking for jobs would reduce the natural rate of unemployment, which is the unemployment rate that exists when the economy is at full employment and all labor market imperfections have been eliminated. This would not only reduce frictional unemployment but also structural unemployment, which is caused by a mismatch between the skills of workers and the needs of employers. It would not directly affect cyclical unemployment, which is caused by fluctuations in the business cycle.

Increasing the Efficiency of Various Employment Agencies to Find Better