What are the three major types of unemployment? What are their causes?
The first is frictional unemployment. Persons who are between jobs as they move from one position to another, can be considered frictionally unemployed. Frictionally unemployed persons generally find work relatively quickly. Since some normal movement between jobs is acceptable, economists don't worry much about frictional unemployment.
The second type of unemployment is structural unemployment in which persons have lost jobs because of a change in the structure of the economy, such that certain jobs have been eliminated. Structurally unemployed persons are less likely to find another job in less time than a frictionally unemployed person. An example of a structurally unemployed person is a middle manager at a large corporation who loses her job when the company "downsizes."
Cyclical unemployment, which arises when the level of economic activity declines, is the third type of unemployment. If the economy operates at less than full employment, cyclical unemployment will exist. The usual cure for cyclical unemployment is an increase in output, which requires more labor to produce it.
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If demand falls and supply falls, equilibrium price will _____ and equilibrium quantity will _____.
Fill in the blank(s) with the appropriate word(s).
Empirical evidence indicates that lower real interest rates lead to ________ in savings.
A. modest increases B. modest decreases C. no change in D. substantial increases
Marginal revenue product describes the:
A. Output produced by the last unit of labor employed B. Revenue received for the last unit of output produced C. Price a consumer paid for the last unit of output produced D. Revenue received for the additional output produced by the last unit of labor employed
The more time that elapses, the
A. smaller the income elasticity of demand for the product. B. more price elastic is the demand for the product. C. greater the income elasticity of demand for a product. D. less price elastic is the demand for the product.