Final answer:
Frictional unemployment occurs when workers are between jobs and is generally short-term. It can be a sign of a healthy economy as it reflects workers seeking better job matches. This type of unemployment is considered natural and can account for a small part of the total unemployment rate.
Step-by-step explanation:
The type of unemployment described as being short-term and occurring when people are transitioning between jobs is known as frictional unemployment. It is a natural and expected part of a dynamic economy, where workers move to new jobs that better suit their skills, or relocate due to various life changes. Frictional unemployment can be beneficial as it allows for better job matches, which can lead to more productivity both for the individual and for businesses.
While it would be ideal for workers to move instantly from one job to the next, practicalities such as finding out about job vacancies, going through the interview process, and potentially relocating mean that there will inevitably be a period of time during which workers are unemployed. This type of unemployment may account for one to two percentage points of the total unemployment rate.
In fact, frictional unemployment is not considered problematic unless it becomes long-term or is exacerbated by other economic factors.