If the federal government implements programs 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.
E)the natural rate of unemployment will rise then fall.

Question

Quizplus · Accepted Answer

The natural rate of unemployment is the rate of unemployment that exists when the labor market is in equilibrium, and there is no cyclical unemployment. When the federal government implements programs to quickly match the unemployed with jobs, it reduces frictional unemployment, which is a component of the natural rate of unemployment. Therefore, the natural rate of unemployment will decrease.

If the Federal Government Implements Programs So That the Unemployed