Answer to Question #102387 in Macroeconomics for sandeep

Question

(a) What is the number of frictional/seasonal unemployed in Eastralia? (1 mark) (b) What is the number of structurally unemployed? (1 mark) (c)What is the number of cyclically unemployed? (2 marks) (d) What category of unemployed do the people in (v) fit into? (2 marks) (e)Explain whether or not there is a clear cut distinction between frictional,structural and cyclical unemployment. (4 marks)

Answer 1

(a) frictional/seasonal unemployed: 1750

(b) structurally unemployed: 250+150=400

(c) cyclically unemployed: 800

(d) category of unemployed do the people in (v) fit into:“discouraged” workers: 370

(e)Frictional unemployment: a component of the natural unemployment rate that arises from the fact that the job search process is not instantaneous.

Structural unemployment: unemployment resulting from structural changes in the economy, such as the development of a new technology or industry; this is part of the natural unemployment rate.

Cyclical unemployment: unemployment associated with recession and expansion; it can be positive or negative. The current unemployment rate will depend on both the natural unemployment rate and the current level of cyclical unemployment.