Question

Classify the following workers into one of the five types of unemployment and explain the classification? Be specific in your answers:

A) Amy is laid off from IBM as part of cost-cutting by the firm

B) Christie is laid off from department store after Christmas

C) Tom quits his present job and is looking for a teaching job

D) Jim is still looking for a job due to higher minimum wage laws

E) Jerry is laid off as a garbage collector due to new machine that collects the trash.

Answer 1

A) This is a Cyclical unemployment and this occurs when an individual loose their jobs as a result of a downturn in aggregate demand.It is called as the demand deficient it occurs when there is a decline in the aggregate demand is persistent.

B)This is a seasonal unemployment.Seasonal unemployment occurs when there is a limited need for a type of work to be performed during a particular period of the year, based on factors like deadlines or climate

C)This is a voluntary unemployemnt it is defined as a situation when workers choose not to work at the current equlibrium wage rate.This is likely to occur when the equilibrium wage rate is below the wage necessary to encourage individuals to supply their labour.

D)This is a classical unemployment when the wages are too high.this explanation of unemployment dominated economic theory before 1930's when workers themselves were blamed for not accepting lower wages or for asking too high wages.classical unemployemnt is also called real wage unemployment.

E)This is a structural unemployment resulting from from industrial reorganization typically due to technological change, rather than fluctuations in supply or demand.