InQuizitive Chapter 7: Unemployment

frictional unemployment

the unemployment which exists in any economy due to people being in the process of moving from one job to another.

cyclical unemployment

type of unemployment where labor forces are reduced as a result of business cycles or fluctuations in the economy,

structural unemployment

unemployment resulting from industrial reorganization, typically due to technological change, rather than fluctuations in supply or demand.

Match each form of unemployment with the appropriate example. Note that some examples may not have a match. (A) Dinh graduated during the pandemic and started to look for a job as a research associate for an investment bank. (B) Helen worked for a dental prosthesis firm that made custom dentures and crowns. During the pandemic, its largest buyers stopped purchasing from Helen's firm and instead purchased 3-D printers and made their own prostheses. (C) Firms that had previously utilized an in-person workforce turned to using automatic chatbots to assist customers during the pandemic. This allowed firms to lay off customer service workers. (D) During the pandemic, demand for elective procedures like knee replacements decreased as most people preferred to delay surgery, in order to reduce their exposure to the virus. This left many surgery nurses without work. (E) Carol worked as a "greeter" for a large box retailer. She decided to retire early to reduce her risk of catching the deadly virus. (F)An unemployed cashier looked for employment because the small grocery store she worked for closed when the owner retired.

(A) Frictional Unemployment (B) Structural Unemployment (C) Structural Unemployment (D) Cyclical Unemployment (E) None of them (F) Frictional Unemployment

Based on the table below, what conclusions can you draw about unemployment in the United States?

Conclusions: The length of time people remained unemployed in 2010 was generally longer than it was in 2019., The year after the Great Recession, almost 40% of unemployed people spent more than 6 months looking for a job. Not a Conclusion: The majority of people who were unemployed in 2019 were looking for work for an extended length of time., The Great Recession did not affect the length of time people remained unemployed.

The labels below describe either cyclical, structural, or frictional unemployment. Drag each label to the correct area on the figure. Keep in mind that not all labels will be used. (A) unemployment between time of graduation and finding a first job in a stable industry (B) unemployment as a result of seeking a new job in a shrinking industry (C) unemployment as a result of seeking a new job in a stable industry (D) an unemployment level that is lower than the natural rate under healthy economic conditions (E) unemployment that occurs as a result of a recession (F) unemployment that occurs as a result of changes in the industrial makeup of the economy (G) unemployment as a result of realizing that there are no good jobs currently available, so one stops looking for work (H) unemployment as a result of going to jail

Cyclical: (D) (E) Structural: (B) (F) Frictional: (A) (C) None of the above: (G) (H)

Which of the following scenarios are examples of job separation (i.e., workers who quit or were laid off) as a result of creative destruction? (A) A company installs a new accounting system that does all the billing automatically, which subsequently shuts down the accounting department. (B) In 1800, over 90% of U.S. workers had jobs in agriculture; by 2017, less than 5% did. (C) Indeed.com provides an Internet-based job service; as a result, newspaper job-offerings shrink and newspapers lay off workers. (D) The book retailer Borders laid off 19,000 employees when it went bankrupt in 2011. (E) McDonalds starts selling a popular new product, the "Quadstack," which causes Burger King to lose customers. Burger King then lays off workers. (F) A regulation is passed that mandates paying workers for 45 days of labor for every year they are with a firm if they are fired or laid off. The day before the legislation goes into effect, three million workers with more than ten years of tenure each are fired. (G) In 2001, there was an economic downturn as a result of a reduction in the valuation of many tech stocks. As a result, companies laid off 1.7 million people. (H) As many schools switched to online learning during the pandemic, many after-school programs had to lay off their employees. (I) People lost jobs because of a loss in demand for in-person bankers

Examples: (A) (B) (C) (D) (I) Not an Example: (E) (F) (G) (H) (I)