Define and give an example of how a spell of structural unemployment can begin
What will be an ideal response?
Structural unemployment arises when changes in technology or international competition changes the skills necessary for jobs or change the location of jobs. For instance, technological change, such as the invention of the personal computer, can switch the skills needed for jobs, say from the ability to repair typewriters to the ability to repair computers. In this case, the people who lose their jobs and do not have the necessary skills to perform the new jobs are structurally unemployed. In addition, there are times when foreign competition causes large downscaling in sectors of the U.S. economy as U.S. firms find that they cannot compete with foreign firms. In this case, the U.S. workers who lose their jobs do not go overseas to take jobs in the expanding foreign companies, so the workers are structurally unemployed.
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Suppose that workers develop a greater taste for leisure, and thus require more time away from work. What is likely to happen to wages and the quantity of labor hired?
A) wages decrease, quantity of labor hired increases B) wages increase, quantity of labor hired decreases C) wages increase, quantity of labor hired increases D) wages decrease, quantity of labor hired decreases
The administrative burden of taxation relates to the a. the disincentive for individuals and businesses to work generate income
b. individuals' cost of preparing tax returns and the government's cost of enforcing tax laws. c. the opportunity cost of social programs. d. the net interest that must be paid on the national debt.