Association of Chartered Certified Accountants (ACCA) Certification Practice Test

Which of the following is a cause of frictional unemployment?

1. Changes in seasonal work

2. Moving between jobs

3. Business cycle recessions

4. Technological advancements obsolete skills

The correct answer is: Moving between jobs

Moving between jobs is a primary cause of frictional unemployment. This type of unemployment occurs when individuals are temporarily unemployed while transitioning from one job to another. It is a natural part of a dynamic labor market, as people may leave their positions voluntarily to seek better opportunities, pursue different career paths, or relocate for personal reasons. The key characteristic of frictional unemployment is that it reflects the time taken for job seekers to find new employment rather than a lack of available jobs in the economy. In contrast, changes in seasonal work typically result in seasonal unemployment rather than frictional unemployment, as workers may be laid off during off-seasons, only to return to their positions. Business cycle recessions are associated with cyclical unemployment, where jobs are lost due to economic downturns. Technological advancements that render certain skills obsolete contribute to structural unemployment, where the mismatch between workers' skills and job requirements leads to longer-term joblessness. Thus, the specific context of moving between jobs highlights the transient nature of frictional unemployment, distinguishing it from other types of unemployment related to economic cycles or structural shifts.