1. Classify each of the types of unemployment described below as "frictional", "structural", or "cyclical". Give a brief explanation of your characterization.

a) With the overall national unemployment rate at under 4%, hundreds of laidoff computer programmers cannot find new programming jobs.

b) A rise in oil prices brought about by a crisis in the Persian Gulf raises costs of production and reduces profits of U.S. manufactures and other firms which use inputs made from imported oil. The ensuing decline in business investment results in a recession, raising the unemployment rate from 4.5% to 9.5% over a period of 18 months.

c) With the Massachusetts economy expanding and the Commonwealth's unemployment rate down to 2.5%, the state's only auto plant shuts down, idling 1,000 workers in Framingham. These workers had been employed at the plant for an average of 20 years, and as a result had developed specialized skills which cannot readily be transferred to other occupations and industries.

d) A recent college graduate not yet employed but searching for a job.

2. Suppose, in April the number of employed stood at 137.7 million while the number of unemployed stood at 8.8 million. What was the unemployment rate in April?

3. In June there are 30,000 people classified as unemployed and the size of the labor force is 600,000. The only change between June and July is that 10,000 people give up looking for work. Compute unemployment rate in July.