Chapter 12 Outline
A. Frictional Unemployment
1. Frictional unemployment is temporary unemployment arising from the normal job search process.
2. Frictional unemployment helps the economy function more efficiently.
B. Structural Unemployment
1. Structural unemployment is the result of structural changes in the economy caused by technological progress and shifts in the demand for goods and services.
a. The structural changes eliminate some jobs in the economy and create others.
2. Persons who are structurally unemployed do not have marketable job skills and may face prolonged periods of unemployment.
C. Cyclical Unemployment
1. Cyclical unemployment is unemployment caused by a drop in the level of economic activity that occurs during the contraction phase of the business cycle.
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