Canadian Securities Course (CSC) Level 1 Practice Exam

Which type of unemployment occurs when workers are unable to fill jobs for reasons such as lacking the required skills or location?

1. Cyclical unemployment

2. Seasonal unemployment

3. Frictional unemployment

4. Structural unemployment

The correct answer is: Structural unemployment

The correct response is structural unemployment because this type of unemployment is primarily linked to fundamental shifts in the economy that alter the demand for specific skills or geographical distribution of jobs. When workers do not possess the necessary skills or are unable to relocate to where the jobs are available, they are often left without employment opportunities, reflecting a mismatch between the job market's requirements and the workers' qualifications or locations. Other types of unemployment differ in nature. For instance, cyclical unemployment arises from overall economic downturns, where jobs are lost due to reduced demand for goods and services. Seasonal unemployment occurs in industries that are influenced by seasonal patterns, where jobs are available only during certain times of the year. Frictional unemployment refers to the temporary period when individuals are between jobs or are entering the workforce for the first time and is not related to skill mismatches or geographic barriers.