Sectoral changes in demand
A)create frictional unemployment,while firms paying wages above equilibrium to attract a better pool of candidates creates structural unemployment.
B)create structural unemployment,while firms paying wages above equilibrium to attract a better pool of candidates creates frictional unemployment.
C)and firms paying wages above equilibrium to attract a better pool of candidates both create structural unemployment.
D)and firms paying wages above equilibrium to attract a better pool of candidates both create frictional unemployment.

Question

Quizplus · Accepted Answer

Sectoral changes in demand create frictional unemployment because workers need time to find new jobs in growing sectors. Firms paying wages above equilibrium to attract a better pool of candidates creates structural unemployment because it raises the cost of labor for all firms in the sector, making it more difficult for firms to hire workers.

Sectoral Changes in Demand