Question

An auto worker is fired for poor job A consultant is laid off because rises sharply scasonal cyclical white teenagers female Hispanics Which of the following factors could economists use to help explain why the NAIRU fell? The transition away from a service economy toward an agricultural economy The lingering effects of the spikes in oll prices The decreasod percentage of teenagers in the labor force ves and the of a finm are called n collective bargaining

Answer 1

1. structural unemployment is associated with the mismatch of skills possesses by a worker and its demand in the industry. It is not associated with a mismatch of demand-supply. Hence from given options, An auto driver is fired due to his poor performance. clearly, the auto driver is unable to meet the skills demanded his work. So it is an example of structural unemployment. An accountant quits her job to become an investment banker. Here it is also associated with the skills of the employee so it falls under structural unemployment. Other two options given are based on the demand and supply in the market. so they do not fall under the category.

2. Government is most likely to Intervene in the case of CYCLICAL UNEMPLOYMENT, it is also called as demand deficit situation. There are not enough jobs to meet the demand of the rush of the unemployed job seekers. such condition arises when productivity falls and demand for goods and services also falls. It results to demand a lesser worker.

4. the NAIRU has declined due to the involvement of an experienced and skilled worker which led to raising the productivity. SOo on that basis we can say that an economist may use the concept of the decreased percentage of teenagers in the labor market. Since these are inexperienced and lacks some labor skills, which raises the NAIRU.