If There Is a Prolonged Recession and Technological Advances Change

question 72

Multiple Choice

If there is a prolonged recession and technological advances change the skill sets of some jobs and eliminate others,what type of unemployment gets larger?

• A)Frictional.
• B)Structural.
• C)Seasonal.
• D)None of the choices are correct.

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Definitions:

Allocative Efficiency

A state of the economy where resources are allocated in a way that maximizes the utility or satisfaction of consumers.

Consumer Surplus

The discrepancy between the aggregate sum consumers are prepared and can afford to spend on a product or service and the actual total amount they end up paying.

Coase Theorem

A principle that if property rights are clearly defined and transaction costs are low, private bargains will ensure that the market always reaches an efficient outcome regardless of who holds the initial property rights.

Externalities

Economic side effects or consequences that affect uninvolved third parties; can be positive or negative.