PS08 Unemployment 1. Identify what type of unemployment (frictional, structural, cyclical) is involved in the following situations and explain. (a) A software developer quits her job to find a new position that offers a better work-life balance and is currently searching for new opportunities. (b) During an economic downturn, many retail stores lay off workers due to a sharp decline in consumer demand for goods and services. (c) A factory worker loses his job because the company replaced human labor with automated machinery and he lacks the skills to work in other industries. (d) An oil refinery worker loses his job because the country has shifted to renewable energy sources, and there are fewer jobs in the fossil fuel industry. (e) A recent university graduate spends a few months looking for her first full-time job after completing her degree. 2. Explain how each of the following changes will affect the natural rate of unemployment. If change has no effect on the natural rate of unemployment, explain why not. (a) The Country of ReadyLand significantly increases government investment in education and vocational training programs aimed at equipping workers with skills that are in high demand, such as in the technology and healthcare sectors. (b) Due to a global financial crisis, many firms in the Country of Wallytopia scale back their production and lay off workers. These layoffs are widespread across industries, but the workforce's skills and the economy's structure remain unchanged. (c) The Country of Bridgetopia implements a temporary fiscal stimulus to combat a recession. The government increases spending on infrastructure, creating jobs in construction and related industries. Once the stimulus ends, however, the unemployment rate is expected to return to its pre-recession levels. (d) The Country of Keepalland passes new labor laws that make it more difficult for firms to lay off workers. As a result, firms become more cautious about hiring new workers, fearing they may not be able to reduce their workforce when needed. (e) The Country of Luxuria's tourism industry suffers a sharp decline due to a global pandemic, leading to widespread layoffs in hotels, restaurants, and other service industries. The pandemic, however, is expected to be temporary.
PS08 Unemployment 1. Identify what type of unemployment (frictional, structural, cyclical) is involved in the following situations and explain. (a) A software developer quits her job to find a new position that offers a better work-life balance and is currently searching for new opportunities. (b) During an economic downturn, many retail stores lay off workers due to a sharp decline in consumer demand for goods and services. (c) A factory worker loses his job because the company replaced human labor with automated machinery and he lacks the skills to work in other industries. (d) An oil refinery worker loses his job because the country has shifted to renewable energy sources, and there are fewer jobs in the fossil fuel industry. (e) A recent university graduate spends a few months looking for her first full-time job after completing her degree. 2. Explain how each of the following changes will affect the natural rate of unemployment. If change has no effect on the natural rate of unemployment, explain why not. (a) The Country of ReadyLand significantly increases government investment in education and vocational training programs aimed at equipping workers with skills that are in high demand, such as in the technology and healthcare sectors. (b) Due to a global financial crisis, many firms in the Country of Wallytopia scale back their production and lay off workers. These layoffs are widespread across industries, but the workforce's skills and the economy's structure remain unchanged. (c) The Country of Bridgetopia implements a temporary fiscal stimulus to combat a recession. The government increases spending on infrastructure, creating jobs in construction and related industries. Once the stimulus ends, however, the unemployment rate is expected to return to its pre-recession levels. (d) The Country of Keepalland passes new labor laws that make it more difficult for firms to lay off workers. As a result, firms become more cautious about hiring new workers, fearing they may not be able to reduce their workforce when needed. (e) The Country of Luxuria's tourism industry suffers a sharp decline due to a global pandemic, leading to widespread layoffs in hotels, restaurants, and other service industries. The pandemic, however, is expected to be temporary.
Chapter1: Making Economics Decisions
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Transcribed Image Text:PS08 Unemployment
1. Identify what type of unemployment (frictional, structural, cyclical) is involved in the following situations
and explain.
(a) A software developer quits her job to find a new position that offers a better work-life balance and is
currently searching for new opportunities.
(b) During an economic downturn, many retail stores lay off workers due to a sharp decline in consumer
demand for goods and services.
(c) A factory worker loses his job because the company replaced human labor with automated machinery and
he lacks the skills to work in other industries.
(d) An oil refinery worker loses his job because the country has shifted to renewable energy sources, and there
are fewer jobs in the fossil fuel industry.
(e) A recent university graduate spends a few months looking for her first full-time job after completing her
degree.
2. Explain how each of the following changes will affect the natural rate of unemployment. If change has no
effect on the natural rate of unemployment, explain why not.
(a) The Country of ReadyLand significantly increases government investment in education and vocational
training programs aimed at equipping workers with skills that are in high demand, such as in the technology
and healthcare sectors.
(b) Due to a global financial crisis, many firms in the Country of Wallytopia scale back their production and lay
off workers. These layoffs are widespread across industries, but the workforce's skills and the economy's
structure remain unchanged.
(c) The Country of Bridgetopia implements a temporary fiscal stimulus to combat a recession. The government
increases spending on infrastructure, creating jobs in construction and related industries. Once the stimulus
ends, however, the unemployment rate is expected to return to its pre-recession levels.
(d) The Country of Keepalland passes new labor laws that make it more difficult for firms to lay off workers. As
a result, firms become more cautious about hiring new workers, fearing they may not be able to reduce their
workforce when needed.
(e) The Country of Luxuria's tourism industry suffers a sharp decline due to a global pandemic, leading to
widespread layoffs in hotels, restaurants, and other service industries. The pandemic, however, is expected to
be temporary.
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