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CFA Level 1
Economics

Types of Unemployment: Skills Mismatch

Very Easy Macroeconomics Unemployment And Inflation

In a market economy, unemployment and inflation are two critical indicators that can signal the overall health of the economy. When evaluating these indicators, it's essential to understand the types of unemployment and their potential causes, as well as the relationship between unemployment and inflation rates.

Consider the following types of unemployment: frictional, structural, cyclical, and seasonal. Additionally, think about how inflation can affect these types of unemployment. With this context in mind, answer the following question:

What type of unemployment generally arises when there is a mismatch between workers' skills and job requirements?

Hint

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