what does cyclical unemployment occur?how can we eliminate it?why does structural unemployment occur?
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1.Cyclical Unemployment = Unemployment that rises during economic downturns, and falls when the economy imporves.
Answer: Economists have observed that over time, the U.S. economy goes through periods of increased economic activity, ultimately peaking, and then declining economic activity, then, a lull for a period of time. This is considered one “economic business cycle,” After one complete cycle, another one begins…and on and on…etc.
When the economy is declining, companies tend to reduce their work force and let people go. When the economy is improving, companies tend to increase production and often attempt to hire more people. In order to eliminate cyclical unemployment, you would have to eliminate business cycles (which is not possible under the mixed market economy that the U.S. currently has).
2. Structural Unemployment = unemployment that occurs when workers skills do not match the jobs that are available.
Example: If a person with a specific skill seeks employment in the local job market in his home town, but no companies need to hire people with that particular job skill, the person seeking the job could be classified as someone who is currently unemployed due to structural unemployment.
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