Question

Structural unemployment is caused bya. short-term changes in the economy.b. temporary layoffs in industries such as construction.c. hifts in the economy that make certain job skills obsolete.d. the impact of the business cycle on job opportunities.2. Which of the following statements is true?a. According to supply-side fiscal policy, lower tax rates would shift the aggregate demand curve to the right, expanding the economy and creating some inflation.b. To combat inflation, Keynesians recommend lower taxes and greater government spending.c. The presence of the automatic stabilizers tends to destabilize the economy.d. Above the optimal tax rate, a reduction in tax rates along the downward-sloping portion of the Laffer curve would increase tax revenues.

Answer 1

Consider the following explanation

Step-by-step explanation:

1. Option C.

Structural unemployment is a type of unemployment which occurs naturally when the economy shifts in time.

This forces certain job skills to become obsolete, due to which mismatch of skills and the jobs available in the economy.

Many workers are also laid off as their jobs no longer match their current skills.

2. Option D.

A laffer curve is a curve which shows a relationship between the taxes imposed within an economy and the tax revenues collected from the imposed taxes.

Above the optimal tax rate, a reduction in tax rates along the downward sloping portion of the laffer curve would increase the tax revenue's.