Q:

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

A:

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?

RELATED FAQS

  1. Is there a natural rate of cyclical unemployment?

    Learn more about cyclical unemployment and find out about the relationship of cyclical unemployment to the natural unemployment ...
  2. What is the difference between structural unemployment and cyclical unemployment?

    Learn more about unemployment in an economy, what structural and cyclical unemployment are, and the differences between these ...
  3. What is the difference between frictional unemployment and structural unemployment?

    Learn about structural unemployment and frictional unemployment, the differences between the two types and their main characteristics.
  4. When does cyclical unemployment become structural unemployment?

    Learn about the conditions under which cyclical unemployment becomes structural unemployment. Find out more about the relationship ...
  5. What is the best way for my startup to have sustainable growth?

    Discover how many years structural unemployment can last. Deciding whether the economy is encumbered by structural or cyclical ...
  6. Do rising unemployment rates tend to increase or decrease investor sentiment and ...

    Discover whether rising unemployment rates tend to increase or decrease consumer confidence and investor sentiment. Unemployment ...
RELATED TERMS
  1. Unemployment

    Unemployment occurs when a person who is actively searching for ...
  2. Unemployment Rate

    The percentage of the total labor force that is unemployed but ...
  3. Structural Unemployment

    A longer-lasting form of unemployment caused by fundamental shifts ...
  4. Full Employment

    A situation in which all available labor resources are being ...
  5. Natural Unemployment

    The lowest rate of unemployment that an economy can sustain over ...
  6. Continuing Claims

    Continuing claims refers to unemployed workers that qualify for ...
Trading Center