When the unemployment rate is very low, most of it tends to be:
A) cyclical.
B) frictional.
C) seasonal.
D) structural.

Question

Quizplus · Accepted Answer

When the unemployment rate is very low, it suggests that most unemployed individuals are moving between jobs and searching for new opportunities. This type of unemployment is known as frictional unemployment, which arises when workers are between jobs or are searching for their first job. It is generally seen as a healthy aspect of the labor market as it allows for a more efficient allocation of labor resources. Cyclical unemployment, on the other hand, is caused by macroeconomic factors such as recessions and business cycles. Seasonal unemployment occurs due to changes in demand for labor during specific seasons or times of the year. Structural unemployment is a long-term type of unemployment that arises due to shifts in the labor market, technological changes, or changes in the overall structure of the economy.

When the Unemployment Rate Is Very Low, Most of It