Question

can you explain # 2 a.b.c. please

2). Consider two countries: Ashleighland and Charlesland. The labor force in each country consis 100,000 workers. In Ashleighland a different 500 workers are unemployed each month. In Charles the same 500 workers are unemployed for the entire vear. Compare and contrast the unemployment situation in the two countries by explaining: (4 points) a). The unemployment rate b). Whether the unemployment is more likely to be frictional or structural. c). What type of policy prescriptions (if any) you might recommend based on their different unemployment situations

Answer 1

2)

a)

Calculate unemployment in country A:

$g+cbMN3u1ZUjQAAAABJRU5ErkJggg==$

Calculate unemployment in country C:

$pa68EQAAAABJRU5ErkJggg==$

Thus, the unemployment rate in country A is $99mP4WR4wHsYalEMY7x+4AAAAASUVORK5CYII=$ and in-country C is .

b)

Frictional unemployment exists in country A and structural unemployment exists in country C.

Here, frictional and structural unemployment exists for both countries A and C respectively because in country A unemployed workers are different each month. Frictional unemployment means unemployment exists due to workers moving from one job to another. Structural unemployment exists due to technological changes.

c)

Some policy prescriptions to reduce frictional unemployment:

• Mandatary educational awareness should be provided to workers.

• Full information about jobs should be provided.

• Provide certain incentives to encourage workers' productivity.

Some policy prescriptions to reduce structural unemployment:

• The government should introduce new skill development programs according to present needs.