Structural Unemployment from Industry Decline

Steps:

• Identify the cause: permanent fall in demand for an industry's products leads to job losses that don't recover.
• Classify unemployment types: match the cause to standard economic categories like cyclical, frictional, seasonal, or structural.
• Eliminate mismatches: rule out temporary or demand-driven types, focusing on long-term shifts.
• Confirm match: permanent industry decline aligns with structural changes in the economy.

Why D is correct:

• Structural unemployment occurs when there's a mismatch between workers' skills and job requirements due to permanent changes, like declining industry demand, as defined in economic theory.

Why the others are wrong:

• A. Cyclical: results from overall economic downturns affecting broad demand, not specific industries.
• B. Frictional: short-term job transitions between roles, not permanent declines.
• C. Seasonal: tied to predictable annual patterns, like weather or holidays, not lasting industry falls.

Final answer: D