Assume that the government decides to drastically decrease welfare, social security, and unemployment payments. How would this action change the unemployment rate? How would it change the labor participation rate?
Explain what the author means by the ‘output gap’ in the 2008-2009 recession.
Frictional unemployment is considered to be a “…permanent and healthy phenomenon in a dynamic, growing economy”. Identify 3 different causes of frictional unemployment.