Suppose That Consumers Decide to Buy More 4K Players and Fewer

question 122

Multiple Choice

Suppose that consumers decide to buy more 4K players and fewer Blu-Ray players. As a result, 4K companies expand production while Blu-Ray companies lay off workers. What is this an example of?

• A) structural unemployment created by efficiency wages
• B) cyclical unemployment created by a recession
• C) frictional unemployment created by a sectoral shift in demand
• D) frictional unemployment created by a sectoral shift in supply

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Definitions:

North American Free Trade Agreement

A trilateral trade bloc in North America created by Canada, Mexico, and the United States to reduce trading costs, increase business investment, and help North America be more competitive in the global marketplace.

General Agreement on Tariffs and Trade

An international treaty created to reduce trade barriers and promote international commerce through the reduction of tariffs and quotas.

Free Trade

Cross-border commerce without the imposition of tariffs, quotas, or any restrictions, allowed to unfold naturally.

Trade Restrictions

Measures implemented by governments to control the flow of goods and services across borders, which may include tariffs, quotas, and embargoes.