Assignment 2 - Course Project Part 2 Business Economics...

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Course Project Part 2 Business Economics Ryan D. Lee 10/1/2010 Question 16-5
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As long as we have a free economy and the invisible hand is allowed to work our economy and the workers will benefit from frictional unemployment. Adam Smith is largely associated with the general rule of our economy that if the invisible hand is allowed to operate freely the market will provide what the market demands. One economic professor when speaking on frictional unemployment is quoted as saying “that people in realizing their self-interests unintentionally benefit the public good,” (Kennedy, 2009) Economists classify unemployment in our country into three different types. “Frictional unemployment is defined as the unemployment that occurs because of people moving or changing occupations,” (Stone, 2007). The important distinguishing characteristic of this type of unemployment is that it is a voluntary choice on the part of the worker in an effort to improve, or at least change, his working situation. “Frictional unemployment is an inherent part of any complex economy that occurs because resources are reallocated from one production activity to another. Such reallocation makes it possible for resources to seek out the production activity for which they are best qualified,” (AmosWeb, 2010). Frictional Unemployment is good for our economy because it means that people are free to choose to improve their working conditions. If someone is not happy with his job he can decide to leave and look for a position in which he is better suited. Finding a better job can mean many things to many different people from better pay to a better working environment. The bottom line is when there is frictional unemployment in an economy it means that people are moving from one job to another because that is what they want to do. As long as our economy provides an opportunity to move freely in the job market frictional unemployment will never disappear and will ultimately benefit those who find themselves part of it. However, the negative impacts of it can be reduced as communication is enhanced and connectivity between employers and the frictionally unemployed improve. In fact, frictional unemployment has helped create more jobs and opportunities for people. In recent years the internet has provided a foundation for companies like Monster, Career Builder and LinkedIn whose major purpose is to help increase communication between the frictionally unemployed and firms seeking employees. In fact in the recent downturn of our economy and
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This note was uploaded on 04/21/2011 for the course STATS GM533 taught by Professor Adams during the Spring '11 term at Keller Graduate School of Management.

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Assignment 2 - Course Project Part 2 Business Economics...

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