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increases unemployment insurance benefits. C. A new law bans labor unions. D. More workers post their resumes at , and more employers use to find suitable workers to hire. E. Sectoral shifts bee more frequent. A C T I V E L E A R N I N G 3: Answers 19 A. The govt eliminates the minimum wage. C. A new law bans labor unions. These are likely to reduce structural unemployment, not frictional unemployment. Which of the following would be most likely to reduce frictional unemployment? A C T I V E L E A R N I N G 3: Answers 20 Which of the following would be most likely to reduce frictional unemployment? B. The govt increases unemployment insurance benefits. E. Sectoral shifts bee more frequent. These are likely to increase frictional unemployment, not reduce it. A C T I V E L E A R N I N G 3: Answers 21 Which of the following would be most likely to reduce frictional unemployment? D. More workers post their resumes at , and more employers use to find suitable workers to hire. Likely to speed up the process of matching workers amp。 jobs, which would reduce frictional unemployment. 22 CHAPTER 28 UNEMPLOYMENT Explaining the Natural Rate of Unemployment: A Summary The natural rate of unemployment consists of  frictional unemployment • it takes time to search for the right jobs • occurs even if there are enough jobs to go around  structural unemployment • when wage is above eq’m, not enough jobs • due to min. wages, labor unions, efficiency wages In later chapters, we will learn about cyclical unemployment, the shortterm fluctuations in unemployment associated with business cycles. 23 CHAPTER 28 UNEMPLOYMENT CHAPTER SUMMARY  The unemployment rate is the percentage of those who would like to work who do not have jobs.  Unemployment and labor force participation vary widely across demographic groups.  The natural rate of unemployment is the normal rate of unemployment around which the actual rate fluctuates. Cyclical unemployment is the deviation of unemployment from its natural rate, and is connected to shortterm economic fluctuations. 24 CHAPTER 28 UNEMPLOYMENT CHAPTER SUMMARY  The natural rate includes frictional unemployment and structural unemployment.  Frictional unemployment occurs when workers take time to search for the right jobs.  Structural unemployment occurs when above equilibrium wages result in a surplus of labor.  Three reasons for aboveequilibrium wages include minimum wage laws, unions, and efficiency wages. 25 CHAPTER 28 UNEMPLOYMENT Business Cycles: Introduction  Over the long run, real GDP grows about 3% per year on average.  In the short run, GDP fluctuates around its trend. • recessions: periods of falling real ines and rising unemployment • depressions: severe recessions (very rare)  Shortrun economic fluctuations are often called business cycl。