After the passage of the North American Free Trade Agreement, which made it less expensive to import goods from Mexico, workers in some industries found their factories being relocated to Mexico to take advantage of lower labor costs. These workers experienced what type of unemployment?

Question

Quizplus · Accepted Answer

The relocation of factories to Mexico due to the lower labor costs resulted in some workers losing their jobs. This type of unemployment is called structural unemployment, which occurs due to changes in the structure of the economy or the demand for labor. The other options, such as cyclical unemployment, occur due to changes in the business cycle, trade unemployment is not a valid term, frictional unemployment occurs when workers switch jobs or enter the workforce, and foreign unemployment is not a valid term.

After the Passage of the North American Free Trade Agreement