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.
E) voluntary.

Question

Quizplus · Accepted Answer

Juanita's unemployment is due to the structural change in the economy as the government cut spending. There are no other job opportunities in the town that match her skills and experience, hence the growers are unwilling to hire her as they know she will leave as soon as she finds a better job. This type of unemployment is known as structural unemployment.

Juanita Earned a B