Suppose people decide to buy fewer GE stoves. If General Electric reduces the number of its employees to reduce its costs but no other stove company does so, which type of unemployment results?

Question

Business

Tucker Lyons

31 July, 22:19

Suppose people decide to buy fewer GE stoves. If General Electric reduces the number of its employees to reduce its costs but no other stove company does so, which type of unemployment results?

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Answers (1)

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Yair Goodman · Answer 1

Frictional unemployment.

Explanation:

The type of unemployment which results from GE's decision is frictional unemployment. Frictional unemployment is when people are unemployed because they are moving from one job to another. In this case because the rest of the industry does not reduce it's employees the employees fired from GE are now in the process of finding others jobs in the industry.