Question

Which of the following is an example of cyclical unemployment?

a) Dora lost her job when the textile factory closed. She does not have skills to work in another industry and has been unemployed for over a year.

b) Hector was laid off from his job with the airline because the recession reduced demand for airline travel. He expects to get his job back when the economy picks up.

c) George is an unskilled worker who mows lawns in the summer but is unemployed the rest of the year.

d) Malia had a job as an engineer but quit when her spouse was transferred to another state. She looked for a month before finding a new job that she liked.

Answer 1

Cyclical unemployment is caused by economic downturns and is exemplified by Hector's airline layoff due to a recession. Frictional unemployment occurs when workers are transitioning between jobs, like the financial analyst moving cities.

Step-by-step explanation:

An example of cyclical unemployment is Hector being laid off from his job with the airline because the recession reduced demand for airline travel. He expects to be rehired when the economy improves. This type of unemployment is directly related to fluctuations in the business cycle, where jobs are lost due to downturns in the economy and are typically regained when the economy recovers.

Frictional unemployment occurs when workers are between jobs. An example is a financial analyst who quits their job in one city to seek a similar job in another city. This is a natural and healthy part of a dynamic economy.

Structural unemployment is exemplified by George, an unskilled worker mowing lawns seasonally, but being unemployed for the rest of the year. It arises due to a mismatch between workers' skills and the requirements of the new job openings, often enhanced by automation, globalization, or changes in industry demands.