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. Structural Frictional Cyclical Unemployment Type Sam recently lost his job as a dishwasher. Minimum-wage legislation keeps employers from adding more of the low-skill positions for which he qualifies, so he has been unable to find work Beth is a real estate agent. House sales in her area have declined because the region has been going through a recession. She has no clients and is currently looking for a new full-time job Teresa is a physician who has decided to relocate to California to be closer to her family. She is currently interviewing with several prestigious hospitals in the San Francisco Bay Area.

Explanation / Answer

Solution:

PART-1)

A) Structural

Explanation: Structural unemployment occurs due to the shifts in the economy, technology improvement and workers' lack of requisite job skills, thus makes it difficult for workers to search job

B) Cyclical

Explanation: Cyclical unemployment occurs because of the ups and downs in the business cycle over time.

C) Frictional

Explanation: Frictional unemployment occurs mainly due to the changes in the demand for labor among firms

PART-2) Solution: TRUE

Explanation: When there is no cyclical unemployment, the economy will be at its natural rate of unemployment

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