a)
The question requires us to determine the type of
a)
Answer to Problem 2FRQ
Answer: Frictional unemployment
Explanation of Solution
An investment in an online application reduces the time person spends on job search and causes the people to get job easily and in less period of time. As the result of this investment, the frictional unemployment in the market will change.
An individual is considered unemployed who is not working, but actively looking for a job.
b)
The question requires us to determine the impact on unemployment.
b)
Answer to Problem 2FRQ
Answer: Decrease.
Explanation of Solution
Frictional unemployment reflects the unemployment that occurs during the time workers spend in a job search. A certain amount of such unemployment is expected always in an economy because job creation and job destruction are constant processes.
The investment in the new application will reduce frictional unemployment in the market.
An individual is considered unemployed who is not working, but actively looking for a job.
c)
The question requires us to determine the impact on the natural rate of unemployment.
c)
Answer to Problem 2FRQ
The natural rate of unemployment will fall.
Explanation of Solution
The unemployment rate that occurs from the effects of structural unemployment and frictional unemployment is considered the natural rate of unemployment.
Natural rate of unemployment = structural unemployment + frictional unemployment.
So, a fall in frictional unemployment will cause the natural rate of unemployment to fall as well because there is a direct relationship between the natural rate of unemployment and frictional unemployment.
An individual is considered unemployed who is not working, but actively looking for a job.
d)
The question requires us to determine the impact on real
d)
Answer to Problem 2FRQ
The value of real GDP will increase.
Explanation of Solution
When people get jobs, their income level will increase. A higher income indicates higher
Therefore, an increase in investments in the online application will result in a higher GDP in the economy.
The gross domestic product (GDP) is the measurement of the final goods and services produced in an economy in a financial year. GDP is the indication of
Chapter 3R Solutions
Krugman's Economics For The Ap® Course
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