Question

what is causing unemployment right now? Is it a lack of aggregate demand? lack of aggregate supply? both? What kind of unemployment are we experiencing, cyclical, structiural, or frictional unemployment?

typed answer please

Answer 1

Answer -  

Cause of Unemployment right now  

The principal cause of the unemployment right now is lack of aggregate demand as the labor is available in the market however due to the COVID-19 pandemic many businesses are affected in a negative way severely such as tourism, hospitality and aerospace are among many others. As the business is facing slowdown they are laying off people and has also freezer hiring which has resulted in unemployment in the society so through this analysis it can be said that the unemployment which is present right now is because of lack of aggregate demand for the labor.

Type of unemployment we are facing

The COVID-19 has resulted into a global recession and slow down and hence the type if unemployment which is present currently is cyclical unemployment. Cyclical unemployment is a type of unemployment in which the overall demand for services and goods is not able to support the full employments it happens during the economic recession or slow down.