๐ Topic Summary
Unemployment isn't just one big blob; it comes in different flavors! Frictional unemployment is when people are in between jobs, like after graduation or when they're searching for a better fit. Structural unemployment happens when there's a mismatch between the skills workers have and the skills employers need, often due to technological changes. Cyclical unemployment is tied to the business cycle; it rises during recessions and falls during economic expansions.
๐ง Part A: Vocabulary
Match the terms with their definitions:
- Frictional Unemployment
- Structural Unemployment
- Cyclical Unemployment
- Labor Force
- Natural Rate of Unemployment
Definitions:
- The sum of all employed and unemployed individuals.
- Unemployment due to economic downturns.
- Unemployment due to skills mismatch or technological change.
- The unemployment rate that exists when the economy is healthy.
- Unemployment due to people being between jobs.
โ๏ธ Part B: Fill in the Blanks
Complete the following paragraph:
_______ unemployment is often considered unavoidable, as it's a natural part of a dynamic economy. _______ unemployment can be addressed through retraining programs. During a recession, we often see an increase in _______ unemployment due to decreased demand for goods and services.
๐ค Part C: Critical Thinking
Explain how government policies can potentially reduce structural unemployment. Give at least two examples.