Unemployment occurs when a worker who is not currently employed is unable to find suitable paid employment. In every economy, however, there will always be people moving between jobs. This group is known as the unemployed. But, if finding another job takes so long so that the individual stops looking, then he/she is classified as a worker and is no longer counted in the unemployment statistics. An economy’s natural rate of unemployment is the sum of its frictional and employment. If the labor market become more efficient so that people looking for work find matching jobs quicker, then the natural rate of unemployment will . The increase in unemployment that occurs during recessions (or downturns) in the economy is known as the type of unemployment.
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