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Chapter 32: Q. 17. (page 782)

What are the two types of unemployment problems?

Short Answer

Expert verified

Cyclical unemployment and frictional unemployment are the 2 main types of unemployment problems.

Step by step solution

01

Step 1. Meaning of unemployment.

Unemployment is the situation when a person who does not have a job is looking for one and is willing to work but is not able to find a job.

02

Step 2. Types of unemployment problems found in high income nations.

a) Cyclical Unemployment- This type of unemployment occurs because of the cyclical trends in the business cycle. Cyclical unemployment will be low when business cycles are at their peak because economic activity is high.When there is a recession, that is, output level declines cyclical unemployment will rise.

b) Natural unemployment- This kind of unemployment includes structural and frictional unemployment. Frictional unemployment is caused due to people moving between jobs, career or location. Structural unemployment is caused when there is a mismatch between the skills possessed and skills demanded in the market.

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Most popular questions from this chapter

Retrieve the unemployment data from The World Bank database (http://databank.worldbank.org/data/ home.aspx) for India, Spain, and South Africa for 2011-2015. Prepare a chart that compares India, Spain, and South Africa based on the data. Describe the key differences between the countries. Rank these countries as high-, medium-, and low-income countries. Explain what is surprising or expected about this data. How did the Great Recession impact these countries?

What strategies did the East Asian Tigers employ to stimulate economic growth ?

What other factors, aside from labor productivity, capital investment, and technology, impact the economic growth of a country? How?

What are the different policy tools for dealing with cyclical unemployment?

Explain why is it difficult to set aside funds for investment when you are in poverty.
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