Question

Gerhard, who used to be a taxi​ driver, stopped looking for employment three months after he lost his job.

A.Frictional unemployment since there is a change in the labor market.

B.Structural unemployment since​ Gerhard's personal expense structure will undergo a change.

C.An exit from the labor force since Gerhard is not searching for a job. This shows he is not willing to work anymore.

D.Cyclical unemployment since the unemployment is both structural and frictional.

Answer 1

C

As Gerhard lost his job, that is he didn't opted for job switching hence he does not fall under frictional unemployment. But as he didn't find the job at the prevailing market condition thus he comes under purview of structural unemployment. But the reason cited for this which ispersonal expense structure will undergo a change. The reason may be that due to shift in the economy hemay not be able to find job.

Lastly now as he is not willing to search for a job, he had exit from the labor force .