Which of the following types of unemployment can exist in an economy that is at its potential output level?
A) cyclical unemployment only
B) structural unemployment only
C) frictional, cyclical, and seasonal unemployment only
D) frictional, seasonal, and structural unemployment only
E) there will be no unemployment in an economy that is at the potential output level

Question

Quizplus · Accepted Answer

Frictional, seasonal, and structural unemployment can exist in an economy that has reached its potential output level. Frictional unemployment occurs when people are in between jobs or searching for a job that better suits their skills. Seasonal unemployment occurs in industries where employment varies by season, such as agriculture or construction. Structural unemployment is due to a mismatch in the demands of the labor market and the skills or location of workers.

Which of the Following Types of Unemployment Can Exist in an Economy