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Chapter 8: Q2. (page 311)

What is the likely effect of such services on the number of people considered to be in the labor force?

Short Answer

Expert verified

Services such as TaskRabbit will increase the labor force since it will reduce frictional unemployment.

Step by step solution

01

The effect on the labor force

TaskRabbit is a job matching service that matches the job-seekers with suitable employers. Such a service reduces frictional unemployment since job-seekers need to spend less time searching for jobs, and finding a suitable job for them becomes a lot easier.

Since frictional unemployment is reduced due to such services, the active labor force or the people in the labor force will increase. The employment rate will increase.

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Most popular questions from this chapter

The widespread use of technology has revolutionized the banking industry, making it much easier for customers to access and manage their assets. Does this mean that the shoe-leather costs of inflation are higher or lower than they used to be?

Explain the following statements.

a. Frictional unemployment is higher when the pace of technological advance quickens.

b. Structural unemployment is higher when the pace of technological advances quickens.

c. Frictional unemployment accounts for a larger share of total unemployment when the unemployment rate is low.

Which of the following are consistent with the observed relationship between growth in real GDP and changes in the unemployment rate as shown in Figure 8-5? Which are not?

a. A rise in the unemployment rate accompanies a fall in real GDP.

b. An exceptionally strong business recovery is associated with a greater percentage of the labor force being employed.

c. Negative real GDP growth is associated with a fall in the unemployment rate.

Suppose that at the peak of the business cycle the United States dramatically increases benefits for unemployed workers. Explain what will happen to the natural rate of unemployment.

How is the matching of job-seekers and employers through services like TaskRabbit likely to affect frictional unemployment?
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