ECON 2 Lecture Notes - Lecture 10: Federal Open Market Committee, Frictional Unemployment, Efficiency Wage
Document Summary
The government eliminating minimum wage and a new law banning labor unions would reduce structural unemployment but not frictional unemployment. The government increasing unemployment insurance benefits and sectoral shifts becoming more frequent increase frictional unemployment. More workers posting their resumes on linkedin and more employers using linkedin to find suitable workers would speed up the process of matching workers and jobs, which would reduce frictional unemployment. Explaining the natural rate of unemployment: a summary: frictional unemployment. Takes time to search for right jobs. Occurs even if there are enough jobs to go around: structural unemployment. When wage is above equilibrium not enough jobs. Due to minimum wages labor unions and efficiency wages. Currency: the paper bills and coins in the hands of the public. Demand deposits: balances in bank accounts that depositors can access on demand by writing a check. V. measures of the us money supply: m1: currency, demand deposits, traveler"s checks, and other checkable deposits.
