Question

What term describes the remaining level of unemployment that occurs even when the economy is healthy?

Short answer

The term that describes the remaining level of unemployment that occurs even when the economy is healthy is "frictional unemployment."

Step-by-step solution

Understand the context

In a healthy economy, some level of unemployment will always be present. This is because people are always shifting between jobs, entering the workforce, or leaving it. Our task is to find out the term that describes this type of unemployment.

Know the types of unemployment

There are four main types of unemployment: frictional, structural, cyclical, and seasonal. Let's understand each of them briefly: 1. Frictional unemployment: This happens when people are between jobs or looking for their first job, and it is a natural occurrence in a healthy economy. 2. Structural unemployment: This is the result of a mismatch between the skills of the job seekers and the requirements of the available jobs due to technological advancements or changes in the economic structure. 3. Cyclical unemployment: This type of unemployment is caused due to fluctuations in the business cycle, i.e., recession or depression periods. 4. Seasonal unemployment: This results from seasonal patterns in certain industries, like tourism or agriculture, where employment is high during specific times of the year and low otherwise.

Identify the correct term

We are looking for the type of unemployment that is present even in a healthy economy. Going through the types of unemployment, we can see that frictional unemployment best matches the description. Frictional unemployment occurs naturally when people are transitioning between jobs, entering, or leaving the workforce.

Answer

The term that describes the remaining level of unemployment that occurs even when the economy is healthy is "frictional unemployment."