Question

Answer the following questions thoroughly, using at least 5-6 sentences for each portion of your explanation.

What does the Unemployment Rate measure? Define the three categories most commonly used to characterize the reason of unemployment. Should we be

concerned with all people who are classified as unemployed? Why? Use the three categories in the defense of your answer.

Answer 1

Unemployment rate is the share of labour force that is jobless,expressed as a percentage.When the economy is in the poor shape and jobs are scarce the unemployment rate can be expected to rise.When the economy is growing at a healthy rate and jobs are relatively plentiful it can be expected to fall.

Three categories most commonly used to characterize the unemployment are:

1.Frictional unemployment: the unemployment which exists in the economy due to people being in the process of movinf from one job to other.

2.Cyclical unemployment: is a factor of overall unemployment that relates to the cyclical tends in growth and production that occur within the business cycle.

3.Structural unemployment: a form of unemployment caused by a mismatch between the skill that workers in the economy can offer and the skills demanded of workers by employers.