Question

Unemployment Type Structural Frictional Cyclical Clancy 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. 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 Kate. Eileen just moved with her husband to Portland, Oregon. She's looking for a job as a paralegal. The following table shows data on frictional, cyclical, structural, and total unemployment for an economy. Unemployment Type Frictional Rate (Percent) 3.1 0.0 1.0 Cyclical Structural Total unemployment 4.1 True or False: This economy is not currently at its natural rate of unemployment. O True O False

Answer 1

1.The first case of Clancy is of structural unemployment because in structural unemployment, due to mismatch of skills the person is unable to find work

The reason can be technological advancement

2.Second case is of cyclical unemployment

Cyclical unemployment is a situation when the economy is going through up and down .

In the given case as there is a recession which causes so many lay off of many employees including Katie .

3.Third case is of frictional unemployment .

Frictional unemployment is a situation when a person try to find a new job or move from one job to another .

In the given case also Elieen just moved with her husband to Portland and finding a job there .

True ,

According to the US data, if unemployment rate is less than 4 % then the economy is said to be have a natural rate of unemployment .

But here the unemployment rate is greater than the 4% so it will not counted as Natural rate of unemployment