ADM 614 Topic 4 Discussion 2

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Types of Unemployment

Cyclic unemployment is the situation whereby people lose jobs due to economic cycles. This is the situations where the economy experiences ups and downs. For example, when an economy experience a boost more jobs are created and people get high pay while when the economy gets to a recession, more jobs are lost and many salaries are slashed. Frictional unemployment is the type of employment that happens when an individual is searching for a new job or in the transition from one job to the other. Structural unemployment is the type of unemployment brought about by low demand in certain types of workers (Stroup,  Sobel, and Macpherson, 161). This is usually brought about by a mismatch of the skills individuals want and the skills wanted by the employer.

If economic resources could be used effectively, the economy could not experience ups and down an indication that there could be no cyclic unemployment. In addition, if the economic resources were utilized effectively, the professional skills could match with what the employer want thus avoiding structural unemployment. Matching of skills and employer requirements would reduce time spent in searching for job and people would not change from one job to the other frequently. Therefore, proper use of the economic resources would help in avoiding unemployment.

Reference

Richard L. Stroup, Russell S. Sobel, and David A. Macpherson. Macroeconomics: Private and Public           Choice. Australia: South-Western Cengage Learning, 2013. Print.