When the Economy Switches Production Toward Services and Away from Manufacturing

question 217

Multiple Choice

When the economy switches production toward services and away from manufacturing and workers in the manufacturing industry are permanently laid off,

• A) frictional unemployment decreases.
• B) frictional and cyclical unemployment increase.
• C) cyclical unemployment increases.
• D) structural unemployment increases.

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Definitions:

Excessive Taxation

Taxing beyond what is fair or reasonable, often perceived as placing undue burden on taxpayers.

S Corporation

A specialized form of corporation in the United States that allows income to be passed through to shareholders for federal tax purposes, avoiding double taxation.

Profit Distributions

The sharing of earnings among the shareholders of a company, often in the form of dividends.

Involuntary Dissolution

The compulsory termination of a corporation or partnership by a court order, often due to failure to comply with legal requirements or insolvency.