Why does unemployment not go to zero during booms?

What will be an ideal response?

While unemployment has a cyclical component—that is, it naturally goes up during recessions as people are laid off and down during booms as people are hired—there are other components of unemployment that do not vary over the business cycle. For instance, some people are going to be transitioning between jobs at all times of the business cycle (this is frictional unemployment). Frictional and structural unemployment rates are nonzero, so "full employment" actually means that some people are unemployed all the time.

Economics

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When the wage rate increases: a. all workers wish to work more hours

b. all workers wish to work fewer hours. c. the number of hours laborers wish to work does not change. d. some workers will wish to work more hours, and some will wish to work fewer hours.

Economics

Which of the following is correct for the Irish economy?

(a) GNP=GDP-NFY. (b) GDP=GNP+NFY. (c) GNP=GDP+NCT. (d) GDP=GNP-NCT.

Economics