Asked by Mitchell Kramer on Jun 20, 2024
Verified
Why might a favorable change in the economy, such as technological improvement or a decrease in the price of imported oil, be associated with an increase in frictional unemployment?
Frictional Unemployment
The short-term unemployment that arises from people moving between jobs, careers, or locations.
Technological Improvement
Enhancements in technology that increase the efficiency of production or the quality of goods and services.
- Familiarize oneself with the causes and impacts pertaining to diverse unemployment types, namely frictional, structural, and cyclical unemployment.
Verified Answer
AS
Alesha SandersJun 26, 2024
Final Answer :
Even generally favorable changes will usually involve some sort of sectoral shock that changes the demand for labor among different firms. For example, a decrease in the price of imported oil would likely reduce the demand for U.S. oil workers and increase the demand for automobile workers. Similarly, technological progress makes some industries decline and others advance, creating frictional unemployment.
Learning Objectives
- Familiarize oneself with the causes and impacts pertaining to diverse unemployment types, namely frictional, structural, and cyclical unemployment.