Question

1. No country can zero unemployment rate. Explain this statement.

Answer 1

The unemployment rate is the proportion of the labor force that do not have jobs. The labor force is the set of people who want jobs or have jobs. There are two components to unemployment: structural unemployment and cyclical unemployment. Structural unemployment describes the "baseline" rate even in a growth economy. In a market economy, it exists because labor conditions change, industry demand patterns change, etc and therefore there will be someone who is on the transition.

Cyclical unemployment, can be zero, because it is defined as the excess unemployment over full employment.

But at any given point, someone is switching jobs, looking for jobs, or otherwise unemployed.