Practice Quiz

CLEP Principles of Macroeconomics Exam Prep

Category - Macroeconomics

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Over the past 25 years, the manufacturing base in the United States has begun to erode due to outsourcing to countries with cheaper production. Skilled workers in automobile and textile manufacturing have found it difficult to find other work. What type of unemployment is this?
  1. Manufacturing
  2. Outsourcing
  3. Structural
  4. Dynamic
Explanation
Answer - C - This is the structural type of unemployment.

Key Takeaway: When workers find it difficult to apply their skills in new employment following the loss of their jobs, they suffer what is termed structural unemployment. For example, when skilled factory workers in the manufacturing sector found themselves laid off due to outsourcing and erosion of the base, many found it difficult to apply their skills to other sectors.
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