Suppose a free- trade agreement with Central America eliminates all tariffs on imported textiles from those countries. Which type of unemployment will be affected in Canada?

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Quizplus · Accepted Answer

Structural unemployment is caused by changes in the structure of the economy, such as technological advancements, changes in consumer preferences, or in this case, changes in trade policy. The elimination of tariffs on imported textiles from Central America means that Canadian textile producers may face increased competition and be forced to lay off workers or shut down operations, leading to structural unemployment.

Suppose a Free- Trade Agreement with Central America Eliminates All