Chapter 13, Problem 1MCQ

To determine

The question requires us to determine the type of unemployment in the given situation.

Explanation of Solution

Frictional unemployment reflects the unemployment that occurs during the time workers spend in a job search. A certain amount of such unemployment is expected always in an economy because job creation and job destruction are constant processes.

So, workers who are not working currently but looking for a job after moving to a new city are considered frictionally unemployed.

Option “a” is correct.

Other options are incorrect because:

b) Structural unemployment is the unemployment that results when workers available for work lack the skills required for the job.

c) Unemployment that occurs due to fluctuations in the business cycle (recession or boom period) is considered cyclical unemployment.

d) The unemployment rate that occurs from the effects of structural unemployment and frictional unemployment is considered the natural rate of unemployment.

e) Full unemployment doesn’t say anything about the cause of unemployment.

Economics Concept Introduction

An individual is considered unemployed who is not working, but actively looking for a job.

Types of unemployment are:

• Structural unemployment,
• Frictional unemployment,
• Cyclical unemployment,
• Seasonal unemployment, and
• Disguised unemployment.