Question

ECO - 252 - Macroeconomics

6. Classify each of the following as either structurally unemployed or frictionally unemployed.

a. Mary is looking for a new job since she lost her job as a seamstress. The factory she worked at moved from North Carolina to California.

b. Curtis has looked for work as an accountant for some time. While the demand for accounts doesn’t appear to be falling, there seems to be more people applying than jobs available.

c. Meredith is looking for work as a computer programmer. Although her prospects are good she hasn't yet taken a job.

d. Tom has a law degree. Several firms have made him offers, but he thinks he might be able to find a firm where his talents could be put to better use.

Answer 1

a) Frictionally unemployed.

Unemployment which occurs when people search for new job is called frictionally unemployed. Mary is unemployed because she is looking for a new job.

b) Structurally unemployed

Unemployment which occurs due to mismatch between the skill worker is offering and skills demanded by firm. Curtis is unemployed because demand of worker is less than the supply. This unemployment arises due to market economies.

c) Frictionally unemployed

d) Frictionally unemployed

Tom is unemployed because he is searching for a better job.