a. Explain the meaning of structural, frictional, and cyclical unemployment. b. Identify whether each of the...

a. Explain the meaning of structural, frictional, and cyclical unemployment. b. Identify whether each of the following reflects structural, frictional, or cyclical unemployment and also define each of these unemployment.

i. A real estate agent is laid off due to slow business after housing sales fall.

ii. An automotive worker is replaced by robotic equipment on the assembly line.

iii. A salesperson quits a job in Ontario and seeks a new career after moving to Alberta.

iv. An employee is fired for poor job performance and searches the want ads each day for work.

(5marks)

Solutions

Expert Solution

structural unemployment: this is the unemployment resulted from industrial reorganisation. this is caused because the mismatch between current skill set of the labours and the new skill demanded by the current industrial set-up.

Frictional unemployment: when people move from one job to another there is a time when the job seeker has to wait in search of a new job. this situation is called frictional unemployment.

Cyclical unemployment: if business cycle leads to decrease in demand for labour due to less demand for the products in the market then it leads to cyclical unemployment.

i. A real estate agent is laid off due to slow business after housing sales fall.

this is an example of cyclical unemployment. here the unemployment is caused due to decrease in the demand of housing hence the fall in demand can be explained by business cycle.

ii. An automotive worker is replaced by robotic equipment on the assembly line.

this is an example of structural unemployment. here the unemployment is caused due to the fact that the skills possessed by the worker is not in demand any more.

iii. A salesperson quits a job in Ontario and seeks a new career after moving to Alberta.

This is an example of frictional unemployment. here the unemployment is caused by the fact of the worker searching for a new job.

iv. An employee is fired for poor job performance and searches the want ads each day for work.

this is an example of frictional unemployment. because he is in the process of searching for a new job.

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Rahul Sunny answered 1 year ago

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