Answer to Question #179719 in Macroeconomics for Moosa Qaisar

Question

Briefly explain various categories of unemployment and discuss which category is most likely for fresh graduates to fall into and why?

US has had the lowest rate of change of underemployment over the years 1990 to 2015. Give possible reasons.

Answer 1

1.Frictional unemployment exists when there is lack of adjustment between demand for and supply of labour.

2.Seasonal unemployment results from seasonal fluctuations in demand.

3.Cyclical unemployment arises due to cyclical fluctuations in the economy.

Frictional Unemployment.

Recent college graduates who are looking for work may not expect to find a job within a year of graduating due to their lack of experience.

The supply of workers in the U.S is greater than the demand for workers, there are layoffs, or when there is a technological change hence the country experiences under employment.