Types of Unemployment in the USA and Policies to Overcome Them

Running head: MACROECONOMIC ASSIGNMENT
Macroeconomic Assignment
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction................................................................................................................................2
Types of unemployment.............................................................................................................2
Types of Unemployment in the USA.........................................................................................3
Policies to overcome unemployment problems.........................................................................6
Monetary Policy.....................................................................................................................6
Fiscal Policy...........................................................................................................................7
Conclusion..................................................................................................................................8
References................................................................................................................................10

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Introduction
The progress of a country and its overall welfare depends on the social, political,
economic and other aspects. The economic conditions of a country and its performance over
time depends on different economic indicators and their dynamics over the years. These
indicators primarily include those of the growth rate of the Gross Domestic Product, the rate
of inflation, the unemployment rate and other similar attributes of immense significance
(Mankiw, 2014).
Of these economic indicators of welfare, the unemployment rate prevailing in a
country holds immense significance as it shows the level of economic abundance of the
people of the country and the general productive scopes and employment scenarios and
threats in this aspect (Agénor & Montiel, 2015). Keeping this into consideration, the
concerned report tries to analyse the primary types of unemployment prevailing in the
economy of the USA in the contemporary period, thereby discussing the monetary and fiscal
policies which the government of the country can implement in order to combat the
concerned problems of unemployment in the contemporary period.
Types of unemployment
In the generalised framework, there are different types of unemployment, which occur
in the economies in the global framework, the primary ones being as follows:
Frictional Unemployment- This form of unemployment occurs in the time period of
transitions of workers from one job to another.
Cyclical Unemployment- The unemployment which occurs in an economy due to the
economic downturns and phases in the business cycle of the economy falls under this
category (Heijdra, 2017).

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Structural Unemployment- This is a more serious and long-term unemployment which
generally occurs due to structural changes in the economy, like that of decline of old types of
industries, development of new industries with changed labour demand and long-term
changes in the market conditions.
Seasonal Unemployment- The unemployment which arises generally in the industries which
produce and supply at certain points of the years (Bernal-Verdugo, Furceri & Guillaume,
2012).
Voluntary and Involuntary Unemployment- The people in the labour force can stay
unemployed willingly, which in known as voluntary unemployment. On the other hand, when
the people, eligible as well as willing to do a job, remain unemployed in an economy, then
this phenomenon is known as involuntary unemployment.
Natural Rate of Unemployment- This is the level of unemployment in the economy which
occurs due to the supply-side factors of the country and its normal to be present in the
country.
Types of Unemployment in the USA
The globally dominant economy of the United States of America has over the years,
experienced different types of unemployment in different periods of time, depending upon
the situations arising in the economy of the country, attributed to both exogenous as well as
endogenous factors influencing the economy of the country as a whole. The cumulative rate
of unemployment of the country, over the years, can be seen to be as follows: