DECA+ Business Management and Administration Practice Exam

Structural unemployment is often a result of which of the following factors?

1. Economic downturns

2. Technological advancements

3. Seasonal changes

4. Increased immigration

The correct answer is: Technological advancements

Structural unemployment occurs when there is a mismatch between the skills that workers possess and the skills needed for available jobs. This often happens due to significant changes in the economy, such as technological advancements. When new technologies are introduced, they can make certain jobs obsolete while simultaneously creating a demand for new types of jobs that require different skills. Workers who are unable or unwilling to adapt to these changes may find themselves unemployed, as they lack the necessary skills for the current labor market. In contrast, economic downturns are typically associated with cyclical unemployment, which is related to the overall state of the economy. Seasonal changes refer to fluctuations in employment tied to specific seasons, and increased immigration can lead to an increase in labor supply but doesn’t inherently cause structural unemployment. Thus, technological advancements stand out as a primary cause of structural unemployment.