Economics 7.2 The Major Types of Unemployment Flashcard Example #35867

Suppose that a nation has a labor force of 100 people. In? January, Amy,? Barbara, Carine, and Denise are? unemployed; in? February, those four find? jobs, but? Evan, Francesco,? George, and Horatio become unemployed. Suppose further that every? month, the previous four who were unemployed find jobs and four different people become unemployed. Throughout the? year, however, the same three people long dash ?Ito, Jack, and Kelley long dash
continually remain unemployed because their skills are a poor match with? employers’ requirements.
Frictional Unemployment rate= Frictional Unemployment / Labor Force x 100

1. 4%
2. 3%
3. 7%

Suppose you are given the following information about a? country:
Add them all together
Internet job? sites, like? Monster.com, have led potential employees to find jobs via the internet almost instantly. This has caused
a fall in frictional unemployement
The type of unemployment that rises as the economy goes into a recession is called
cyclical
By providing information and reducing the costs of job? search, the? Internet’s impact on the job market is to reduce
frictional
The economy of Finlandia is at full employment when
there is some unemployment due to friction in the labor? market, but there is no cyclical unemployment.
Which of the following measures will lower the natural rate of? unemployment?
More high school graduates enter college without looking for employment right away.
Consider an economy where the natural rate of unemployment is equal to 5?%.
If the actual unemployment rate is equal to 7?%, then
cyclical unemployment rate is 2?%
Full employment means
there is a level of unemployment consistent with? “normal” frictions in the labor market.
Unemployment due to the fact that workers must search for appropriate job offers is called frictional unemployment.
True
Structural unemployment is related to the movement of workers from? low-paying to? high-paying jobs.
False
Cyclical unemployment results from business recessions.
True
When the economy is at full? employment, the unemployment rate is zero
False
The natural rate of unemployment includes
frictional and structural unemployment
__________unemployment occurs because of transaction costs in the labor market. For? example, workers do not have full information about vacancies and must search for jobs.

___________ unemployment occurs when there is a poor match of? workers’ skills and abilities with available? jobs, perhaps because workers lack appropriate training or government labor rules reduce? firms’ willingness to hire.

The levels of frictional and structural unemployment are used in part to determine our? (somewhat arbitrary) measurement of the ______________

Frictional

Structural

Natural

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