Define the following words and give an example for each one - adjustable-rate mo

Question

Define the following words and give an example for each one -

adjustable-rate mortgage (ARM)

cost-of-living adjustments (COLAs)

indexed

What type of unemployment (cyclical, frictional, or structural) applies to each of the following:

1.) Landscapers laid off in response to drop in new housing construction during a recession.

2.)Coal miners laid off due to EPA regulations that shut down coal fired power

3.)A financial analyst who quits his/her job in Chicago and is pursing similar work in Arizona

4.)Printers laid off due to drop in demand for printed catalogues and flyers as firms go the internet to promote an advertise their products.

5.)Factory workers in the U.S. laid off as the plants shut down and move to Mexico and Ireland.

Explanation / Answer

ARM : It is nothing but interest rate is adjusted according to the market on specified interval of time, If intrest rates are higher it will get hiked and lower it will get lowered.

COLA: It is adjustments that are made to your social security pensions according to inflation index. If inflation is higher then you are more likely to get higher payments of social security.

1) Cyclical

Because recession is cyclical he was laid off due to recession

2) Structural

Changes were made to laws that does not allow polluting firm anymore

3) Frictional

As she searches for another job in another company or city

4) Structural

Likely to be unemployed and new skill sets needed

5) Structural

Likely to be unemployed new skills needed to find another job

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