Which type of unemployment would be affected with the following changes? Would it go up or down?
a. Employment benefits are increased.
b. Minnesota has heavy snowfall.
c. Online job searches become more effective.
d. Coal has a large, permanent decrease in demand.
e. More people have been retrained to develop new skills.
f. Demand for goods and services in the economy falls sharply.
While the definition of unemployment never changes, the underlying unemployment may be caused due to various reasons. It is important for the government to know what reason has caused unemployment.
Answer and Explanation: 1
a) Frictional unemployment would decrease as people would not want to stay voluntarily unemployed and lose out on the benefits.
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fromChapter 6 / Lesson 3
Unemployment can be the result of several economic factors, some of which are predictable, like business closers necessitated by a pandemic, while others are not. Learn about cyclical, frictional, and structural unemployment and discover how economists define and categorize the three types of unemployment.