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Labour-saving technological progress allows more outputs to be produced with a given amount of labour, and it also contributes to the expansion of production. (5 points)

By incentivizing investment, it compensates for some of the jobs it has destroyed and may even create more jobs than previously existed. The total job reallocation process is the sum of job creation and destruction. Typically, the net growth of employment is typically small and positive. (5 points)

Relation to the rate of unemployment and the cyclical phase: when unemployment is high, the vacancy rate is low; and when unemployment is low, the vacancy rate is high. Some factors prevent newly unemployed people from being matched with newly posted jobs (process of labour market matching) (5 points)

Contrary to the initial fear against the machine, the constant increase in the amount produced in an hour of work has not resulted in ever-increasing unemployment. It is wages that on average have risen, not unemployment. The wage adjustment gap phenomenon (5 points)

The short-run effects depend on the kinds of work a worker does:

The robots are labour-replacing. For routine jobs in which the machines and skills are substitutes, the value of a worker's endowment is reduced by the new technology because the robot can replace the worker. The robots are also labour-enhancing: For those jobs in which the machines and skills are complements, the value of a w