Unemployment

Question 1

frictional unemployment

Answer 1

• transitioning between jobs
• usually short term
• caused by geographical & occupational immobility

Question 2

structural unemployment

Answer 2

• demand for labour does not match supply of labour
• usually long term
• caused by industries declining & others growing

Question 3

cyclical unemployment

Answer 3

• lack of AD causing unemployment (lack of jobs etc)

Question 4

real wage unemployment

Answer 4

• wages stuck above equilibrium level due to trade unions & minimum wage