Chapter 11: Unemployment and the Phillips curve

Question 1

What is the time taken to find work between jobs called?

Answer 1

Frictional unemployment

Question 2

What is it called when workers work in different times of the year?

Answer 2

Seasonal unemployment

Question 3

What unemployment arises from recessions and slumps due to the business cycle (booms and busts)?

Answer 3

Cyclical (demand deficiency) unemployment

Question 4

What unemployment occurs when you don’t have the right level of education, even where workers are needed or changes in an industry leads to workers becoming obsolete?

Answer 4

Structural unemployment

Also from foreign competition and discrimation.

Question 5

Discuss the Philips curve:

Answer 5

Phillips curve claims a relationship between inflation and unemployment.

Supply shock shifts right, aggregate demand increases or decreases along curve.