Identify each person in the table as structurally, frictionally, or cyclically u
ID: 1119758 • Letter: I
Question
Identify each person in the table as structurally, frictionally, or cyclically unemployed. Unemployment Type A recent recession has reduced the number of visitors to a local theme park. The park has had to lay off many of its employees, including Beth. Teresa just graduated from college and is looking for a full-time position with an investment banking firm. Sam recently lost his job as a waiter at a local restaurant. A recent increase in the minimum wage keeps local employers from adding more of the low-skill positions for which he qualifies, so he has been unable to find work. He continues to look for a job, but he's considering going back to school for vocational training. Structural Frictional Cyelical The following table shows data on frictional, cyclical, structural, and total unemployment for an economy. Rate Unemployment Type (Percent) 3.5 0.0 1.1 4.6 Cyclical Structural Total True or False: This economy is not currently at its natural rate of unemployment. True FalseExplanation / Answer
Answer : (i) Cyclical unemployment is the reason for the losing job during recession time period. A recent recession has reduced the number of visitors to local theme park. The cyclical unemployment means that its create a contraction phase of the business cycle.
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(ii) Fricitional unemployment is the reason because tersa has just graduated from college and its looking for full time position with an investment firm . it is time of searching the job according to qualification.
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(iii) Structural unemployment is the reason where job has been lost because less skill available to the person at that time period.It is basically shift in the infrastructure and workers required special training.
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Answer : False, the economy is at currently at natural rate of unemployment because here there is only structural and fricitional unemployment where as cyclical unemployment in an economy is equal to zero.
As in the economy unemployment causes due to recession is not a part of natural rate of unemployment.