Question

Suppose in the imaginary country of Xurbia, a remarkable new tool which improves the ability for job seekers to find out about jobs at different companies and make contact with those companies with relative ease is introduced and widely adopted by employers and job seekers. What do you expect will happen to the natural rate of unemployment in Xurbia?

Answer 1

Answer:

It will decrease.

Explanation:

Due to the innovation that helps job seekers find jobs easily, the natural rate of unemployment which is the summation of frictional unemployment and structural unemployment will reduce as more unemployed can easily connect with employers of labour and employers can also easily get in contact with recruits.