Question

Assume the country of Technologia invests in an online system that efficiently matches job-seekers with employers and significantly reduces the time required for job searches.
A. Which type of unemployment will Technologia's investment affect?
B. Will unemployment increase or decrease?
C. Given the change in unemployment from part b. what will happen to the natural rate of unemployment in Technologia? Explain.
D. Given your answer to part b. what will happen to real GDP in Technologia? Explain.

Answer 1

Answer:

Technologia's online system helps to increase the employment of the people in Technologia.

Explanation:

A. Technologia's investment in the online system to help the match the job seekers with the employers will greatly affect the frictional unemployment.

B. With the help of this online system, it will help to decrease the unemployment in Technologia.

C. The natural unemployment will reduce in Technologia as the natural unemployment includes the frictional unemployment as well as the structural unemployment. Here since the frictional unemployment will decrease, the natural unemployment also decreases.

D. The real gross domestic product or the GDP will increase. Te real GDP is the country's total goods and service produces. When unemployment reduces, the production of various goods and service will increases as now people can afford to buy those goods an services. Hence the real GDP increases.

Answer 2

The following information should be considered:

A. Technologia's investment in the online system to help the match the job seekers with the employers will greatly affect the frictional unemployment.

B. With the help of this online system, it will help to decrease the unemployment in Technologia. Also, the job search time is reduced and job matching is easy,

C. The natural unemployment will decrease in Technologia as the natural unemployment includes the frictional unemployment as well as the structural unemployment. Here since the frictional unemployment will decrease, the natural unemployment also decreases.

D. Real GDP should increase because more workers can be employed so production is increased.

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