Correct Response: C. Structural unemployment is a long-term form of unemployment due to fundamental changes in the economy that make the knowledge and skills of a group of workers out-of- date and no longer useful. A group of skilled workers losing their jobs when technological advances render their skills obsolete is an example of structural unemployment. Seasonal or holiday unemployment is not structural unemployment, since it is temporary and not the result of fundamental changes in the economy (A). A recession causing layoffs is not structural unemployment, since the jobs will come back when the recession ends. This is cyclical unemployment (B). When a company goes out of business and lays off employees, the employees are still marketable employees (D). Frictional unemployment is the period when a worker is searching for or transitioning from one job to another.
