A nation has a workforce of 500 workers. In every month, 10 workers leave jobs, and 10 different workers find jobs. However, there are also 20 workers who lack the skills to be employed, and thus remain unemployed throughout the year. There is no seasonal unemployment in this economy, and the economy is considered to be at full employment.

Question

Aylin Moran

Business

17 September, 07:59

A nation has a workforce of 500 workers. In every month, 10 workers leave jobs, and 10 different workers find jobs. However, there are also 20 workers who lack the skills to be employed, and thus remain unemployed throughout the year. There is no seasonal unemployment in this economy, and the economy is considered to be at full employment.

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May · Answer 1

In this economy, the rate of frictional unemployment is?

frictional unemployment = 10/500 = 2% frictional unemployment results from workers leaving a job because they are looking for a better one, it is not considered negative and happens naturally in any economy.

In this economy, the rate of structural unemployment is?

structural unemployment = 20/500 = 4% structural unemployment happens when workers do not have the skills required to take be employed.

In this economy, the rate of cyclical unemployment is?

0% Since the economy is at full employment level, it means that the economy is growing, therefore cyclical unemployment (unemployment due to recessions) doesn't apply.