Final answer:
Frictional unemployment is caused by workers searching for better employment opportunities, while structural unemployment arises due to a mismatch between skills and job openings. After several years of economic growth, the majority of unemployment is mainly due to the natural rate.
Step-by-step explanation:
Frictional unemployment is a type of unemployment that occurs when people are in between jobs or are searching for better employment opportunities. It is caused by the time it takes for workers and employers to find each other. Examples of frictional unemployment include recent college graduates looking for their first job, individuals who have quit their job and are actively looking for a new one, and workers who have been laid off and are searching for employment in a different industry.
Structural unemployment, on the other hand, is a type of unemployment that arises due to a mismatch between the skills and qualifications of workers and the available job openings. It occurs when certain industries or occupations decline, leading to a decrease in demand for workers with specific skills. Examples of structural unemployment include workers in the manufacturing industry who lose their jobs due to automation, and coal miners who become unemployed as the energy sector shifts towards renewable energy sources.
After several years of economic growth, the unemployment in an economy would be mainly due to the natural rate of unemployment. This is because as the economy grows and reaches its potential GDP, cyclical unemployment decreases. At the same time, frictional and structural unemployment, which are part of the natural rate, continue to exist. Therefore, the majority of unemployment during a period of economic growth is typically attributed to the natural rate of unemployment.