Question

Matthew lost his job as a real estate agent due to the business going under after the GFC forced the world economy into recession. Is Matthew frictionally un employed, structurally unemployed or cyclically unemployed? Explain your answer!

Answer 1

Unemployment is a complex socio-economic phenomenon, in which part of the economically active population does not have work and earnings. I think Matthew cyclically unemployed. Cyclical unemployment is the release of labor, caused by the general downturn in production due to cyclical fluctuations. The magnitude and duration of cyclical unemployment reach the peak during the crisis. So, we have the same situation. In economics, a recession is a business cycle contraction which results in a general slowdown in economic activity and cyclical unemployment.