Consumers decide to buy more computers and fewer typewriters.As a result,computer companies expand production while typewriter companies lay-off workers.This is an example of
A)structural unemployment created by efficiency wages.
B)cyclical unemployment created by a recession.
C)frictional unemployment created by a sectoral shift in demand.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

The change in demand from typewriters to computers represents a sectoral shift, which leads to frictional unemployment as workers need to transition into new jobs. The cyclical unemployment created by a recession would not be applicable in this scenario, and there is no indication that efficiency wages are a factor.

Consumers Decide to Buy More Computers and Fewer Typewriters