Frictional unemployment occurs due to

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Question restated: Frictional unemployment occurs due to
Options:
 a) a downturn in the business cycle; often referred to as demand-deficient unemployment.
 b) changes in demand for workers due to weather conditions and other seasonal factors.
 c) a mismatch between the skills of available workers and the jobs required by firms.
 d) the normal job search time required by people when changing jobs, initially entering the labour force, or re-entering the labour force.

Option a: A downturn in the business cycle is typically associated with cyclical unemployment, not frictional unemployment. Cyclical unemployment arises from overall weak demand for goods and services during recessions, leading firms to reduce hiring or lay workers off. This is distinct from the ordinary search process workers undertake when changing jobs or re-entering the labour market.

Option b: Seasonal unemployment describes predictable, periodic fluctuations tied to the time of year, such as holiday layoffs or agricultural cycles. While seasonal patterns influence unemployment in some sectors, they are not the core cause of frictional unemployment, which is about the transition and search process rather than predictable seasonal demand shifts.

Option c: A skills-job mismatch, or structural unemployment, occurs when there is a lasting discrepancy between workers’ skills and the requirements of available jobs. This is a longer-term issue tied to changes in the economy or technology, not the short-term process of searching for a new position.

Option d: This statement highlights the normal job search process experienced by individuals who are changing jobs, entering the labour force for the first time, or re-entering after a pause. Frictional unemployment is the period of time people spend unemployed while they search for suitable positions that match their preferences and skills, reflecting voluntary mobility and informational frictions rather than macroeconomic downturns or structural skill gaps.

In summary, the definitions align with the standard categorization of frictional unemployment as the short-term searching and transitional phase in the labor market, rather than cyclical, seasonal, or structural causes.

MUF0062 Economics Unit 2 - Semester 2, 2025 Revision Quiz - Unemployment (10 - 15 minutes)

Frictional unemployment occurs due to

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