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?

MORE FAQS

  1. Is there a natural rate of cyclical unemployment?

  2. What is the difference between structural unemployment and cyclical unemployment?

  3. What is the difference between frictional unemployment and structural unemployment?

  4. When does cyclical unemployment become structural unemployment?

  5. What is the best way for my startup to have sustainable growth?

  6. Do rising unemployment rates tend to increase or decrease investor sentiment and consumer confidence?

  7. What's the difference between cyclical unemployment and seasonal unemployment?

  8. What are some causes of structural unemployment?

  9. What happens when inflation and unemployment are positively correlated?

  10. How does automated work affect structural unemployment rates?

  11. How does the U.S. Bureau of Labor Statistics calculate the unemployment rate published monthly?

  12. How did the Great Recession affect structural unemployment?

  13. What is the key difference between the participation rate and the unemployment rate?

  14. How does the Bureau of Labor Statistics determine the unemployment rate?

  15. Are Social Security benefits affected by unemployment benefits?

  16. What are some of the key shortcomings of how the U.S. unemployment rate is determined each month?

  17. What are the key points when getting ready to file for unemployment aid?

  18. How do you financially prepare yourself for unemployment?

  19. How can investors use trends in the unemployment rate to evaluate the outlook of credit services companies?

  20. What are the three major economic components necessary for stagflation to occur?

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 Rate

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

    Unemployment occurs when a person who is actively searching for ...
  3. Continuing Claims

    Continuing claims refers to unemployed workers that qualify for ...
  4. Structural Unemployment

    A longer-lasting form of unemployment caused by fundamental shifts ...
  5. Unemployment Compensation

    Funds paid by the state to unemployed workers who have lost their ...
  6. Natural Unemployment

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

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center