Question

Decide whether each of the following is frictional, structural, or cyclical unemployment:

a. The economy gets worse, so General Motors shuts down a factory for four months, laying off workers. cyclical structural frictional
b. General Motors lays off 5,000 workers and replaces them with robots. The workers start looking for jobs outside the auto industry. cyclical structural frictional
c. About 10 workers per month at a General Motors plant quit their jobs because they want to live in another town. They start searching for work in the new town.

Answer 1

Answer and Explanation:

The classification is as follows:

a. Cyclical unemployment

Since the economy got worse and the factory would be shut down for 4 months so this represent that the economy would go into recession

b. Structural unemployment

As General motors would lays off 5,000 workes and wants to subsitute with robots so here there is a mismatch of the skills & characteristics according to the job requirements

c. Frictional unemployment

Frictional unemployment is classify as a short-term unemployment that occurred for matching the workers with the available jobs