Why is frictional unemployment important to have in any economy? Frictional unemployment is the short-term unemployment of people who are changing jobs, careers, or locations. This category of unemployment includes the jobless who have the skills and competencies to land a job, and are in the process of finding a job, but have not landed a job yet. Workers who look out for a new job when still retaining their old jobs do not count under frictional unemployment.
Many economists consider frictional unemployment a sign of economic well-being, for this type of unemployment only exists in a fast-growing economy with an expanding, mobile, flexible, and adaptable labor force having choices. Frictional unemployment benefits the workers as it allows them to seek the jobs they like most and for which they remain best suited, and benefits the companies by allowing them to choose from among the best talent.
Absence of frictional unemployment entails people remaining in the same jobs for life, creating a static system that suppresses innovation and rusticates skills. Negative fallouts of frictional unemployment come when workers delay re-entering the workforce or when job mismatches become too frequent. This reduces the availability of talent to companies and increases turnover, causing losses to productivity and the economy as a whole. This causes governments and policymakers to try and reduce frictional employment. Explain why Hyperinflation has such a devastating impact on economies.
Explain what it takes to stop hyperinflation. Hyperinflation defines a large increase in the price level. It has been said that there is no exact definition for the term, but cases of hyperinflation tend to be expresses in terms of multiples rather than percentages. The reason why such country suffered hyperinflation is that the government is spending too much money from the tax revenue which leads to a high or large deficit of funds and because of that they will tend to print more paper money to cover up the shortage.
The effects of hyperinflation is so rough that can lead to loss of many jobs, close down of many businesses and even hunger for below poverty class due to extreme rise of prices. Since the value of money has becoming less worth and people loss jobs then they also tend to spend and buy less and with this effect hyperinflation will be get even worse if product commodities demand in the market constantly decrease; suppliers also produce less since production cost is too high and product demand will eventually decrease.
Enable to avoid or abate the effects of hyperinflation purchasing powers of the consumer must increase and this will only be possible if government will create more jobs for the people, government must stop bailing out money for big companies instead create infrastructure and new information and technology to develop short-term plans to bounce back in the economy, companies must collect weekly instead of collecting long term receivables and also government must protect the country and its people by limiting companies to outsource product and resources.
Another way to stop hyperinflation is to change the currency and forms of government but in my opinion I think that will be the last resort to undertake if all possible means will come to naught. Chapter 25, Question 7 Why is there free trade between states in the United States but not necessarily between the countries? The United States Constitution gives the federal government the power to regulate commerce between. It would be stupid for Congress to set up interstate trade barriers, which would stifle our economy.
Article 1 Section 8 gives Congress power to restrict and regulate commerce with both states and foreign governments. Since there is no such thing as an international constitution, countries are free to set up taxes and other barriers to trade with other countries. For example, America’s government may want to protect American wheat farmers, so it will set a tariff, or tax, on imported wheat so that American wheat will be cheaper and sell more.
Section 9 sets limitations Congress can set on regulations and restrictions placed on states that are not limited or applicable on foreign governments. No Tax or Duty shall be laid on Articles exported from any State. No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another: nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.
* Frictional Unemployment: Explanation ; Examples by N Nayab Edited ; published by Linda Richter on Oct 22, 2010
* Core Economics by Gerald W Stone
* Ecron’s Blog
* United States Constitution