Q. Person A has recently lost his/her job due to recession. Which of the following will describe A’s situation the best?
Red Book
Red Book

[A] Frictionally unemployed

[B] Seasonally unemployed

[C] Not in the labour force

[D] Cyclically unemployed

Answer: D
Notes:
  • Frictional unemployment is a type of unemployment that arises when workers are searching for new jobs or are transitioning from one job to another. During a recession. it tends to decline because workers become more concerned about job security since fewer job opportunities are available in the market.
  • Seasonal unemployment is when people who work in seasonal jobs become unemployed when demand for labor decreases. For example it may often takes place in locations that see high volumes of tourists, as different tourist attractions can close or slow their operations depending on the time of year and season.
  • Person A will be counted as a part of the labour force unless he/she decided to give up working altogether, since they lost their job and may be still looking for a job , he/ she will be considered part of the labour force and will be called unemployed.
  • Cyclical unemployment is the unemployment associated with the business cycle. As, Person A lost his/her job because there was a recession, then A would be regarded as cyclically unemployed.

Source- Article

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