Question: a suppose between 2017 and 2018 the total number of...
(a) Suppose between 2017 and 2018 the total number of people employed and the unemployment rate both fell. Briefly explain how this is possible. [2 marks]
(b) In addition to the payment of unemployment benefits, discuss why extra costs are borne by the federal government during times of rising unemployment. [2 marks]
(c) A politician makes the following argument: ‘The economy would operate more efficiently if frictional unemployment were eliminated. Therefore, a goal of government policy should be to reduce the frictional rate of unemployment to the lowest possible level.’ Briefly explain whether you agree with this argument.