(TCOs E and F) Discuss structural, cyclical, frictional, and natural unemployment. What fiscal and monetary policies...

(TCOs E and F) Discuss structural, cyclical, frictional, and natural unemployment. What fiscal and monetary policies are appropriate to fight unemployment? What type of unemployment will be affected most by these policies? Why? Which will be affected least? Why? (20 points)

Expert Solution

Unemployment is a situation where people are ready to work under existing wage rate but unable fin the job the following are the types of the unemployment.

Structural unemployment- refers to situation people lose the job situation drastic changes in the economy example technological progress in the particular industries, or due to government policies etc leads to the unemployment situation economy.

Cyclical unemployment- refers to the situation where occurs due to economic ups and downs int he economy.

Frictional unemployment- occurs due to the mismatch between the skill and jobs, the people leave the existing the job and search for the better job.

The Natural rate of the unemplyment refers to the combination of the all these types o the unemployment.

The expansionary Monetary and Fiscal policy will help to fight against these types of the unemployment.

Cyclical and Natural types of the unemployment affect the most under this types of the policy thses]types of the unemployment occurs every sector of the economy due to ups and downs fluctuation.

Least affected types are Frictional and Structural it occurs generally due non-economic factors and it occurs for particular industries hence the role of these policies minimum.

Rahul Sunny answered 2 years ago

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