Question of the Week

Unemployment resulting from changes in the basic composition of the economy, which at the same time opens new positions for trained workers is known as:

a) Structural Unemployment
b) Cyclical Unemployment
c) Frictional Unemployment
d) Natural Unemployment
e) None of these are correct


Answer:

The correct answer is a.

An example of structural unemployment is the technological revolution. Computers might have eliminated jobs, but it also opened up new positions for those who had the skills to operate the computers.

Frictional unemployment occurs when workers and employers have inconsistent or incomplete information. For example a person might be able to get a job, but is holding out for a better paying one.

Cyclical unemployment results from changes in the business cycle.

Natural unemployment is similar to the long run average unemployment. It is important to remember that 'full employment' is when the economy is at its natural rate of unemployment.

Have a Financial Question?
Financial Professionals
  1. How Much Does A Financial Advisor Earn?
    Investing Basics

    How Much Does A Financial Advisor Earn?

  2. Growth Strategies For Financial Advisors
    Professionals

    Growth Strategies For Financial Advisors

  3. Eyeing China? Consider These Economic Indicators
    Economics

    Eyeing China? Consider These Economic Indicators

  4. 8 Essential Tips For Retirement Saving
    Investing Basics

    8 Essential Tips For Retirement Saving

  5. 'Donut Hole' Essentials For The Financial Advisor
    Investing Basics

    'Donut Hole' Essentials For The Financial Advisor