In each of the following situations, indicate what type of unemployment is Melan

Question

In each of the following situations, indicate what type of unemployment is Melanie facing [i.e. frictional, structural, real wage, or cyclical]?

[a] Due to the current economic downturn, Melanie has been laid off from her programming job. Her employer promises to rehire her when business picks up.        

     [b]     When Melanie and her co-workers refused to accept pay cuts, her employer outsourced their programming tasks to workers in another country. This phenomenon is occurring throughout the programming industry.

     [c]     After completing a complex programming project, Melanie is laid off. Her prospects for a new job requiring similar skills are good, and she has signed up with a programmer placement service. She has passed up offers for low-paying jobs.

Explanation / Answer

a) it is cyclical unemployment which is due to business cycles.

b) Structural umplyment as there is a mismatch between employers and employees expectation

c) Frictional Unemployment as the unemployment is due to trasition time needed to go from one job to another

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