If the labor market becomes more efficient so that the unemployed are more quickly matched with jobs, then
A) the natural rate of unemployment will increase.
B) the natural rate of unemployment will decrease.
C) the natural rate of unemployment will not change.
D) the natural rate of unemployment could either increase or decrease.

Question

Quizplus · Accepted Answer

A more efficient labor market means that there is less time between when a worker becomes unemployed and when they find a new job. This reduces the amount of time workers spend searching for jobs, and as a result, the natural rate of unemployment decreases.

If the Labor Market Becomes More Efficient So That the Unemployed