Reflecting the state of the economy in 2008, the Bureau of Labor Statistics reported in October that over 1000 jobs were lost in the legal services sector. For example, one firm in Chicago stated that it had fired 54 lawyers in 2008. A representative from the firm stated that most had worked in its real estate division.
The lawyers that were fired are an example of unemployment.
A) efficiency wage
B) frictional
C) cyclical
D) structural

Question

Quizplus · Accepted Answer

The lawyers who were laid off due to the economic downturn and a decrease in demand for legal services are an example of cyclical unemployment, which occurs during economic downturns when there is a decrease in demand for goods and services. Efficiency wage refers to when firms pay workers more than necessary to reduce turnover and increase productivity. Frictional unemployment is temporary unemployment that arises from the process of matching workers with jobs, such as when workers are between jobs or looking for their first job. Structural unemployment is caused by a mismatch of worker skills and job requirements, such as when workers do not have the necessary education or experience for available jobs.

Reflecting the State of the Economy in 2008, the Bureau