3. Types of unemployment The three people described in the following table are c

Question

3. Types of unemployment The three people described in the following table are categorized as unemployed by the Bureau of Labor Statistics. Identify each person in the table as structurally, frictionally, or cyclically unemployed. Unemployment Type Structural Frictional Cyclical Juanita just graduated from college and is looking for a full-time position with an investment banking firm. Gilberto 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. 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 Neha. The following table shows data on frictional, cyclical, structural, and total unemployment for an economy. Unemployment Type Rate (Percent) Frictional 3.2 Cyclical 0.0 Structural 1.1 Total unemployment 4.3 True or False: This economy is currently at its natural rate of unemployment. True False

Explanation / Answer

1) Cyclical

2) Structural

3) Frictional

4) True, because cyclical unemployment is 0% which means the economy is at its natural rate of unemployment.

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