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Exchange Rate Regimes: Advantages and Disadvantages

   

Added on  2020-02-19

11 Pages1363 Words459 Views
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Economic concepts1NameProfessorInstitutionCourseDate
Exchange Rate Regimes: Advantages and Disadvantages_1

Economic concepts2Cyclical unemploymentIt occurs when workers lose their work as a result of the downturns that exist in the businesscycle. The gross domestic product is used to tell the time when business contracts. Given that theeconomy contracts for at least two quarters, then it is said to be in a recession.When the economy goes back to the phase of expansion in the business cycle, those who are notemployed or were laid off will reenter the job market. Cyclical employment is temporary since it dependson the contraction length. A recession is typical if it lasts for 18 months. A depression on the other sidecan last for even ten years (Layard et al, 2013 pg. 71).Frictional unemploymentIt occurs when workers abandon their work to search for improved ones.in most occasions, thiskind of unemployment happens on a voluntary basis, but in other cases, it can be as a result of thetermination of a job with a given cause. The term friction is used to show the time, effort and theexpenditure that is employed by a worker to find some new job positions (Layard et al, 2013 pg. 81).In most cases, friction is not avoidable since worker have to look for new opportunities, attendinterviews and have to move even before establishing new job opportunities. However, frictionalunemployment is in most cases a short term form of unemployment.Structural unemploymentThis kind of unemployment refers to the mismatch that exists between the jobs that are availablecompared to the skills.it is not caused by the forces of business cycle like the cyclical unemployment butby other forces. It happens in the cases whereby the shifts in the economy makes it hard for some givengroups of people to find jobs. This kind of unemployment can keep the rate of unemployment high evenafter the recession is gone (Layard et al, 2013 pg. 112).
Exchange Rate Regimes: Advantages and Disadvantages_2

Economic concepts3Seasonal unemploymentThis refers to a working contract whereby a worker is employed for a given period in a year, andwhen the contract expires, then the worker remains unemployed. Examples, where demand, production,and employment are seasonal, include tourism and leisure and retailing (Layard et al, 2013 pg. 121).2.
Exchange Rate Regimes: Advantages and Disadvantages_3

Economic concepts4The graph below is showing a downward sloping demand curve.The demand curve is downward:
Exchange Rate Regimes: Advantages and Disadvantages_4

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