Juanita earned a B.S. in engineering and went to work for a large defense contractor in a small town in California. When the government cut spending, Juanita and 99 others were laid off. The only other business in the town is growing grapes to be made into raisins, but the growers refuse to hire laid-off engineers, knowing they will leave at the first opportunity. The unemployment Juanita is experiencing is:
A) cyclical.
B) structural.
C) permanent.
D) frictional.

Question

Quizplus · Accepted Answer

Juanita is facing structural unemployment, which is caused by a mismatch between the skills of workers and the requirements of available jobs in the market. The fact that the only other business in the town is not willing to hire engineers indicates that there is a structural issue in the job market for engineers in that area. Cyclical unemployment is caused by economic downturns and tends to be temporary, while permanent unemployment is when a person is unable to find work due to reasons such as a disability or lack of job opportunities in their field. Frictional unemployment is when someone is between jobs and is actively seeking employment.

Juanita Earned a B