To operate efficiently, an economy generally "needs" ________ unemployment.
A) cyclical
B) frictional
C) structural
D) seasonal

Question

Quizplus · Accepted Answer

An economy generally needs some level of frictional unemployment, which is the short-term unemployment that results from workers searching for jobs that better match their skills, preferences or location. This allows for a more efficient allocation of labor, as workers are able to find jobs that better suit them, and employers are able to hire workers with the necessary skills. Too much frictional unemployment can be inefficient, but zero frictional unemployment is not realistic or desirable. Cyclical, structural, and seasonal unemployment are all types of unemployment that can be harmful to the economy and are typically viewed as undesirable.

To Operate Efficiently, an Economy Generally "Needs" ________ Unemployment