Frictional unemployment goes up when:
A) Students quit work to return to school at the end of the summer.
B) A corporation transfers a worker to another city.
C) A worker quits one job in order to search for another.
D) There is inadequate demand for labor.

Question

Quizplus · Accepted Answer

Frictional unemployment is the temporary unemployment that arises as workers move between jobs. It occurs due to the time lag between the end of one job and the beginning of another. When a worker quits a job to search for another, it increases the level of frictional unemployment because that worker is temporarily unemployed between jobs. Options A and B are not examples of frictional unemployment because they are more seasonal and geographic in nature, respectively. Option D is an example of cyclical or demand-deficient unemployment, which occurs when there is insufficient demand for labor due to economic downturns.

Frictional Unemployment Goes Up When