Question

The unemployment which is associated with the inadequacy of productive capacity to create enough jobs for all those able and willing to work refers to _________ .

1. Frictional unemployment
2. Cyclical unemployment
3. Structural unemployment
4. Open unemployment

Answer 1

Correct Answer - Option 3 : Structural unemployment

The correct answer is Structural unemployment.

• Frictional unemployment:
  • It is a type of unemployment that occurs as a result of workers switching from one job to another in searching for new jobs.
  • Frictional unemployment is considered search unemployment. 
• Structural unemployment:
  • It is a type of unemployment that arises from the mismatch between the jobs available in the market and the available worker's skills in the market. 
  • This type of unemployment is caused by changes in the economy, such as deindustrialization, which leaves some unemployed workers unable to find work in new industries with different skill requirements.
• Cyclical unemployment:
  • It is a type of unemployment that occurs as a result of the business cycle, where unemployment rises during recessions and declines with economic growth.
• Open unemployment is the situation when a person is willing to work, is educated but is unable to get a job and work.