The three people described in the following table are categorized as unemployed by the Bureau of Labor Statistics.
Identify each person in the table as structurally, frictionally, or cyclically unemployed.
Unemployment Type
Structural
Frictional
Cyclical
A recent recession has reduced the number of visitors to a local theme park. The park has had to lay off many of its employees, including Poornima.
Hubert recently lost his job as a waiter at a local restaurant. A recent increase in the minimum wage keeps local employers from adding more of the low-skill positions for which he qualifies, so he has been unable to find work. He continues to look for a job, but he's considering going back to school for vocational training.
Kate just moved with her husband to Portland, Oregon. She's looking for a job as a paralegal.
The following table shows data on frictional, cyclical, structural, and total unemployment for an economy.
Unemployment Type
Rate
(Percent)
Frictional 1.1
Cyclical 0.0
Structural 3.9
Total unemployment 5.0
True or False: This economy is currently at its natural rate of unemployment.
True
False

A) 1.Cyclical unemployment

2. Structural unemployment

3. Frictional unemployment

B.True

Explanation:.

Cyclical unemployment is the unemployment that comes with economic cycles. It rises during recessions and falls during economic expansions. . Because Poornima lost his job due to the recession, then he would be termed to be cyclically unemployed.

Hubert is Structural unemployed because there is a mismatch between the jobs available and his skills in his workplace

Kate is frictionally unemployed because she needs more time to locate employers ready to employ her

Frictional unemployment occurs because job seekers are constantly seeking for employment.

B.True

Total unemployment equals sum of frictional, structural, and cyclical unemployment. For the economy to be in its natural rate of unemployment, total employmebt must equal the sum of frictional and structural unemployment without cyclical unemployment which is due economic uncertainties. Because cyclical unemployment is 0.0%, the economy is at its natural rate of unemployment.

Poornima is cyclically unemployed because she was fired due to a decrease in the number of visitors since the economy is at a recession. Cyclical unemployment is caused by economic downsides.

Hubert is structurally unemployed because he lost his job due to an increase in the minimum wage rate. Structural unemployment refers to systemic changes in the economy which result in an increase in unemployment. The two main causes for structural unemployment are rises in the minimum wage that change game rules, and lack of abilities and qualifications that match job openings.

Kate is frictionally unemployed because she left her old job voluntarily and is currently looking for a job in a different location.

True ⇒ the natural rate of unemployment = frictional + structural unemployment