Unemploment (causes)

Question 1

Frictional unemployment

Answer 1

When people are either temporarily between jobs or just entering (or re-entering) the labour force. It is short-term and will always be in the economy.
Inevitable and always desired in an economy.

Question 2

Seasonal unemployment

Answer 2

Caused by a change in demand for certain positions at various times of the year. Always present in the economy.

Question 3

Cyclical unemployment

Answer 3

Caused by a fall in AD. Called demand-deficient unemployment. Occurs during the downturn of the business cycle.
The actual output is below the potential output.

Question 4

Structural unemployed

Answer 4

Caused by a `mismatch of skill in the (types) labour market. Will always be present in an economy.
Not related to overall demand.

Question 5

Occupational immobility

Answer 5

Workers are unable to move from one job to another (due to lack of skill).

Question 6

Geographical immobility

Answer 6

Workers are unable to move from one location to another (housing, visa etc.)