Answer:
Lowered throughout 1990 s; labor force participation rate
Explanation:
The recession of 1990-1991 which lasted for 8 months elevated unemployment rate to 8.1% in 1992, but following 1990 s expansion fell to 4.6% in 2001. Increase in labor force participation, mainly with Baby Boomers generation, which was in its prime ( ages between 37 and 55 in 2001) lead to positive growth in the 90 s. There were numerous other reasons like:
- significantly lower oil prices between mid-to-late 1990 s
- reform of welfare system, which significantly reduced the time users can receive aid
- more egalitarian tax structure
- job growth associated with informational technology revolution
If people have rational expectations, the economy may not have to endure an unemployment rate as high as predicted by the short-run Phillips curve.
The statement is false.
The Phillips curve shows the relationship between inflation and unemployment. In the short-run, inflation and unemployment are inversely associated; as one amount will increase, the alternative decreases.
In the end, the unemployment rate is independent of inflation and the Phillips curve is vertical on the herbal fee of unemployment. Whilst actual inflation exceeds predicted inflation, unemployment exceeds the natural fee.
An increase in fee expectancies shifts the Phillips curve upward and makes the inflation-unemployment alternate-off much less favorable. in the end, the unemployment charge is unbiased of inflation and the Phillips curve is vertical at the natural price of unemployment.
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The answer is structural unemployment.
Long-term unemployment brought on by changes in the economy is referred to as structural unemployment.
Even while there are open positions, there is a mismatch between what employers require and what the current workforce can provide.
Long-term structural unemployment typically requires significant reform to reverse.
Technology has a tendency to make structural unemployment worse by marginalizing some employees and making some jobs, like manufacturing, obsolete.
Additional to the business cycle, other factors contribute to structural unemployment. This implies that structural unemployment can persist for decades and that drastic change may be required to address the issue.
Hence, The kind of unemployment that exists when there is a mismatch between a worker's skills and the jobs or the location of jobs available is structural unemployment.
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