The three people described in the following table are categorized as unemployed by the Bureau of Labor Statistics.**Identify each person in the table as structurally, frictionally, or cyclically unemployed.**| Unemployment Type | Structural | Frictional | Cyclical ||-------------------|------------|------------|----------|| Paolo recently lost his job as a waiter at a local restaurant. A recent increase in the minimum wage keeps local employers from adding more of the low-skill positions for which he qualifies, so he has been unable to find work. He continues to look for a job, but he’s considering going back to school for vocational training. | ○ | ● | ○ || Automobile demand has fallen during a recent recession, and Amy has been laid off from her job on the assembly line. | ○ | ○ | ● || Sharon just graduated from college and is looking for a full-time position with an investment banking firm. | ○ | ● | ○ |The following table shows data on frictional, cyclical, structural, and total unemployment for an economy.| Unemployment Type | Rate (Percent) ||-------------------|----------------|| Frictional | 3.0 || Cyclical | 0.0 || Structural | 1.0 || Total Unemployment| 4.0 | **Case Study on Unemployment Types****Scenario Descriptions:**1. **Paolo's Situation:** - Paolo recently lost his job as a waiter at a local restaurant. A recent increase in the minimum wage keeps local employers from adding more of the low-skill positions for which he qualifies, so he has been unable to find work. He continues to look for a job, but he's considering going back to school for vocational training. - **Unemployment Type Options:** - Frictional - Cyclical - Structural2. **Amy's Situation:** - Automobile demand has fallen during a recent recession, and Amy has been laid off from her job on the assembly line. - **Unemployment Type Options:** - Frictional - Cyclical - Structural3. **Sharon's Situation:** - Sharon just graduated from college and is looking for a full-time position with an investment banking firm. - **Unemployment Type Options:** - Frictional - Cyclical - Structural**Table: Unemployment Data**- **Unemployment Type | Rate (Percent)** - Frictional: 3.0% - Cyclical: 0.0% - Structural: 1.0% - Total Unemployment: 4.0%**Question:****True or False:** This economy is currently at its natural rate of unemployment.- True- False**Explanation of Table:**The table provides a breakdown of unemployment types in an economy. - Frictional Unemployment (3.0%): Typically involves temporary transitions such as people moving between jobs or entering the workforce for the first time.- Cyclical Unemployment (0.0%): Arises from economic downturns or recessions. A rate of 0% suggests no cyclical unemployment, indicating the economy is not in a downturn.- Structural Unemployment (1.0%): Caused by a mismatch between workers' skills and job requirements or other structural changes in the economy.- Total Unemployment (4.0%): The sum of frictional and structural unemployment, in this case, aligns with what is often considered the natural rate of unemployment, where the economy is operating efficiently without cyclical unemployment pressures.

Structural Unemployment This type of unemployment occurs due to mismatch of skills possessed by the workers and those demanded by the employers in the market. Cyclical Unemployment This type of unemployment rises during economic downturns and falls when the economy improves. It is affected by changes in business cycles. Frictional Unemployment This unemployment unemployment occurs when people take time to find a job.Scenario 1. Paolo is facing Structural Unemployment. Paolo recently lost job as a waiter. Due to lack of skills as demanded by the employers, he is unable to get a job and he is considering to get some training to improve his skills to get a good job. Scenario 2. Amy is facing Cyclical Unemployment. Amy has lost his job. This is because of recession automobile industry has faced fall in demand and thus due to recession it has laid off workers. Scenario 3. Sharon is facing Frictional Unemployment. Sharon has graduated from college and looking for job in investment banking sector. Sharon is searching and waiting to find the right type of employment matching her skills, salary requirements, work culture, qualifications etc. Yes, economy is currently at natural rate of unemployment. Natural Rate of Unemployment = Frictional Unemployment + Structural Unemployment = 3% + 1% = 4% Structural Unemployment is considered as part of natural unemployment. This is because due to technological advancement some workers will always be unemployment due to lack of proper skills required by employers. Frictional Unemployment is also considered as part of Natural Unemployment. Some workers will always leave the present job and some will find new jobs as per their requirements.

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The three people described in the following table are categorized as unemployed by the Bureau of Labor Statistics. Identify each person in the table as structurally, frictionally, or cyclically unemployed. Unemployment Type Structural Frictional Cyclical Paolo recently lost his job as a waiter at a local restaurant. A recent increase in the minimum wage keeps local employers from adding more of the low-skill positions for which he qualifies, so he has been unable to find work. He continues to look for a job, but he's considering going back to school for vocational training. Automobile demand has fallen during a recent recession, and Amy has been laid off from her job on the assembly line. Sharon just graduated from college and is looking for a full-time position with an investment banking firm. The following table shows data on frictional, cyclical, structural, and total unemployment for an economy.

The three people described in the following table are categorized as unemployed by the Bureau of Labor Statistics. Identify each person in the table as structurally, frictionally, or cyclically unemployed. Unemployment Type Structural Frictional Cyclical Paolo recently lost his job as a waiter at a local restaurant. A recent increase in the minimum wage keeps local employers from adding more of the low-skill positions for which he qualifies, so he has been unable to find work. He continues to look for a job, but he's considering going back to school for vocational training. Automobile demand has fallen during a recent recession, and Amy has been laid off from her job on the assembly line. Sharon just graduated from college and is looking for a full-time position with an investment banking firm. The following table shows data on frictional, cyclical, structural, and total unemployment for an economy.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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