Assume Smith is temporarily unemployed because he has voluntarily resigned his job with company A and will begin a better job next week with company B. Smith would be considered to be:

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Here’s the situation to analyze: Smith is temporarily unemployed because he voluntarily left his job at company A and plans to start a better job at company B next week.
Option a: structurally unemployed. This occurs when there is a mismatch between workers’ skills and the structure of the economy or insufficient demand in industries, not simply a voluntary job transition. Since Smith’s unemployment is due to a voluntary move with a planned re-employment, this does not fit structural unemployment.
Option b: cyclically unemployed. This type arises from failing aggregate demand in the economy during downturns, leading to layoffs across cycles. Smith’s case is not tied to a macroeconomic recession or cyclical downturn; it’s a short-term, voluntary transition, so cyclicality isn’t the driver here.
Option c: frictionally unemployed. This category covers short-term unemployment as workers move between jobs or search for new ones that better match their preferences or skills. Smith resigned to take a better job next week, which is a classic example of intentional, brief frictional unemployment while job search and transition occur.
Option d: not in labour force. Being not in the labour force would mean not actively seeking work or not available for work. Smith is actively transitioning to a new job next week, indicating he is part of the labour market and not outside it.
In summary, the scenario aligns with frictional unemployment because it involves a voluntary, temporary gap between jobs as the individual secures a better position, rather than structural deficits, cyclical downturns, or withdrawal from the labour force.

ECF1200 - S1 2025 Practice Exam 2

Assume Smith is temporarily unemployed because he has voluntarily resigned his job with company A and will begin a better job next week with company B. Smith would be considered to be:

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