Explain the three main types of unemployment experienced within an economy. Provide at least one example demonstrating each type of unemployment. 3-4 sentances
The three main types of unemployment experienced within an economy are cyclical unemployment, frictional unemployment, and structural unemployment.
Cyclical unemployment occurs when there is a downturn in the business cycle, leading to decreased demand for goods and services. An example of this type of unemployment would be during the 2008 financial crisis when many companies laid off employees due to a decrease in consumer spending.
Frictional unemployment is caused by the time it takes for individuals to find a new job after leaving their previous one. An example of this would be a recent college graduate who is searching for their first job and may experience a period of frictional unemployment while looking for suitable employment opportunities.
Structural unemployment is caused by a mismatch between the skills of the workforce and the requirements of available jobs. An example of this would be workers in industries that are becoming obsolete, such as coal miners losing their jobs due to the declining demand for fossil fuels.