Canadian Securities Course (CSC) Level 1 Practice Exam

What kind of unemployment is associated with normal labor force turnover due to reasons like schooling or quitting?

1. Cyclical unemployment

2. Frictional unemployment

3. Structural unemployment

4. Seasonal unemployment

The correct answer is: Frictional unemployment

Frictional unemployment is the kind of unemployment associated with normal labor force turnover due to reasons like schooling or quitting. Frictional unemployment occurs as individuals move between jobs, re-enter the workforce, or enter the workforce for the first time, causing temporary periods of unemployment. This type of unemployment is considered natural and reflects the time it takes for individuals to find a job that fits their skills and preferences. Options A, C, and D are not correct in this context. Cyclical unemployment is associated with fluctuations in the business cycle, structural unemployment arises from mismatches between the skills of the labor force and the requirements of available jobs, and seasonal unemployment occurs due to seasonal variations in employment demand.