Chapter 8, Problem 1QFT

To determine

To explain: The way frictional unemployment is affected due to matching of job seekers and employers through services like Company TR.

Concept Introduction:

Frictional Unemployment: This kind of unemployment exists when the employed people leave their job in order to find a better one.This kind of unemployment is voluntary in nature.

Answer to Problem 1QFT

• Many of the already employed workers prefer to work as a freelancer with the advancement of technology.

• The transformation of the market is possible by the matching online jobswith the service provided.

Explanation of Solution

• Few companies prefer to hire temporary worker instead of permanent ones, during the peak times. Therefore, the role of temporary staff is becoming important with time.

• Many people stay unemployed every year, so these people can get temporary employment. Therefore, if this expanding of market is continued, then there will be riser in pool of workers.

• When people use services provided by company TR, they will leave their old jobs to find a better replacement which takes time. This will lead to an increase in frictional unemployment.