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Question:

1.Over the years, innovations in farm machinery have displaced a lot of labor?

Thus increased unemployment. Would these changes in unemployment be considered increases in full employment underemployment or recessions? If you said the former, which sector of unemployment (frictional, structural, cyclical) increased?

Answer:

This would be an increase in structural unemployment. It cannot be recessionary, because it says nothing about a decrease in output below full-employment level. It is not frictional, which relates only to the time delay between when someone is unemployed and when they get a job that is available and that they are qualified for. It would be structural, as the structure of the economy has changed. The people have skills for jobs that are no longer available, but not for the jobs that replaced them: jobs relating to the production and distribution of the new farm machinery. In the sense that there are fewer of these new jobs than there were of the old jobs, then the natural rate of employment would decrease by the difference in available jobs.

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