Question

One factor that reduces the natural rate of unemployment is:

A) The recent proliferation of temporary employment agencies.
B) More generous unemployment benefits.
C) A binding minimum wage.
D) A slowdown in productivity growth.

Answer 1

The growth of the temporary worker industry has helped reduce the natural rate of unemployment by providing job opportunities for workers looking for permanent work.

Step-by-step explanation:

The growth of the temporary worker industry has helped reduce the natural rate of unemployment. Temp agencies provide jobs for workers while they are looking for permanent work and can serve as a clearinghouse to connect workers with employers. Temp jobs can act as a stepping-stone to permanent employment, reducing frictional unemployment.