Structural unemployment

Question

Quizplus · Accepted Answer

Structural unemployment is caused by changes in the structure of the economy, such as technological advances or shifts in consumer demand. These changes can leave some workers without the necessary skills or in the wrong location to find employment, which can lead to long-term unemployment. Frictional unemployment, on the other hand, is caused by temporary transitions between jobs and generally lasts for shorter periods of time. Therefore, choice B is the best answer. The other choices are incorrect because technological progress can actually increase structural unemployment, structural unemployment does not necessarily fall during the expansion phase of the business cycle, and more generous unemployment compensation benefits can actually increase unemployment, including structural unemployment.

Structural Unemployment