Answer to Question #266156 in Macroeconomics for Economist Student

Question

Which of the following is not true:

A. Cyclical unemployment exists because of recession

B. Full employment requires that no cyclical unemployment exists on the labor market

C. Structural unemployment exists because of mismatched worker skills and job availability.

D. It is logically impossible for both the unemployment and the employment rates to both simultaneously increase or decrease

E. Frictional unemployment on the labor market arises from a lack of information in the labor market.

Answer 1

It is false that Frictional unemployment on the labor market arises from a lack of information in the labor market. Frictional unemployment arises when people moves from one job searching for another vacancy.