Explanation:

There are three main types of unemployment – cyclical, structural, and frictional unemployment. In practice, these cannot be measured directly, and they can often overlap, but they provide a useful way of thinking about unemployment. x Frictional unemployment: Frictional unemployment occurs when people move between jobs in the labor market, as well as when people transition into and out of the labor force. This type of unemployment is generally shorter term (less than one month). Frictional unemployment is likely to occur at all points of the business cycle and, like structural unemployment, may not influence wages or inflation. x Structural unemployment: Structural unemployment is caused by fundamental shifts in the economy that make it difficult for workers to find employment. Structural unemployment occurs when there is a mismatch between the jobs that are available and the people looking for work. This mismatch could be because job seekers don’t have the skills required to do the available jobs, or because the available jobs are a long way from the job seekers. Hence statement 1 is not correct. o Structural unemployment tends to be longer lasting than other types of unemployment. This is because it can take a number of years for workers to develop new skills or move to a different region to find a job that matches their skills. As a result, workers who are unemployed because of structural factors are more likely to face long-term unemployment (for more than 12 months). In contrast to cyclical unemployment, structural unemployment exists even when economic conditions are good. x Seasonal unemployment: Seasonal unemployment occurs when people are unemployed at particular times of the year when demand for labor is lower than usual. For example in sectors such as agriculture and tourism, production takes place only in certain seasons. x Cyclical Unemployment: Cyclical unemployment occurs with changes in economic activity over the business cycle. During an economic downturn, a shortfall of demand for goods and services results in a lack of jobs available for those who want to work. Businesses experiencing weaker demand might reduce the number of people they employ by laying off existing workers or hiring fewer new workers. As a result, people looking for work will also find it harder to become employed. The opposite situation occurs when demand strengthens. o Hence recent layoffs by tech companies can lead to an increase in cyclical unemployment. Hence statement 2 is not correct.