Sally Wong is a resident of North and is unemployed because she lost her job in a clothing factory that closed due to international competition. Identify the type of unemployment that Sally is experiencing.
Sally Wong is a resident of North and is unemployed because she lost her job in a clothing factory that closed due to international competition. Identify the type of unemployment that Sally is experiencing.
Chapter27: The Philips Curve And Expetactions Theory
Section: Chapter Questions
Problem 8SQP
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- Sally Wong is a resident of North and is unemployed because she lost her job in a clothing factory that closed due to international competition. Identify the type of
unemployment that Sally is experiencing. - Identify the type of unemployment that would need to be zero in order to determine a country’s natural rate of unemployment.
- Assume North’s economists estimated the natural rate of unemployment at 7%. The following table consists of the unemployment rates from a labour force survey for selected months:
Month |
Structural |
Seasonal |
Frictional |
Cyclical |
March |
3% |
1% |
2% |
5% |
April |
3% |
2% |
3% |
3% |
May |
3% |
1% |
1% |
1% |
Identify whether there was a recessionary gap or an inflationary gap in each of March, April, and May.
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