Question

Use the table below to answer the next question.

Year	Employed	Structural	Frictional	Cyclical	Unemployed
2003	1,800	50	100	50	200
2004	2,400	100	100		300
2005	2,000		150	180	500
2006	2,660	40		0	140

Determine the number of people structurally unemployed for the year 2005.

rev: 05_30_2018

Multiple Choice

• 150

• 220

• 170

• 0

Answer 1

Unemployment is a condition where a person wants to work but he/she is unable to find work. Unemployment can be divided into three parts:

1). Structural Unemployment - Unemployment caused due to lack or mismatch of skills.

2). Frictional Unemployment - Unemployment caused when people are switching jobs.

3). Cyclical Unemployment - Unemployment caused due to change in business cycles like a recession

Unemployment = Structural + Frictional + Cyclical

We can use the above equation to find structural unemployment in 2005,

500 = Structural + 150 + 180

500 = Structural + 330

Structural Unemployment = 170

The number of people who were structurally unemployed in 2005 is 170. Hence, the correct answer is the third Option i.e. 170.