Frictional unemployment:
A)occurs only during expansions.
B)is due to time workers spend in job search.
C)is the difference between cyclical unemployment and the natural rate of unemployment.
D)hasn't occurred since the 1930s.

Question

Quizplus · Accepted Answer

Frictional unemployment is caused by the time that workers spend in job search. This type of unemployment can occur at any point in the business cycle and is not specific to expansions or contractions. Choice A is incorrect because frictional unemployment can occur during both expansions and contractions. Choice C is incorrect because the natural rate of unemployment includes frictional unemployment as well as structural unemployment, while cyclical unemployment is caused by changes in the business cycle. Choice D is incorrect because frictional unemployment continues to occur in modern economies.

Frictional Unemployment