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UNEMPLOYMENT - Coggle Diagram
UNEMPLOYMENT
Causes
Demand-deficient - due to a lack of aggregate demand. For example, during the great financial crisis in 2008, the scaling down of business operations in many countries caused a rise in demand-deficient unemployment.
Frictional - due to the time needed for workers to find new jobs or transition between jobs. An example of frictional unemployment is a fresh graduate searching for a job.
Structural - due to a mismatch between the skills of the unemployed and those required by producers seeking factors of production. For example, a shift from manufacturing to a knowledge-based economy could cause a rise in structural unemployment as factory workers lose their previous jobs and need time to learn new skills.
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