In the Case in Point Entitled "Might Increased Structural Unemployment

Multiple Choice

In the Case in Point entitled "Might Increased Structural Unemployment Explain the 'Jobless Recovery' Following the 2001 Recession," economists Erica Goshen and Simon Potter note that when a layoff is temporary, the employer "suspends" the job, due to slack demand, and the employee expects to be recalled once demand picks up. With a permanent layoff, the employer eliminates the job. Which of the following statements is consistent with their observations?

A) Both temporary and permanent layoffs create cyclical unemployment.
B) Both temporary and permanent layoffs create structural unemployment.
C) Temporary layoffs create structural unemployment while permanent layoffs create cyclical unemployment.
D) Temporary layoffs create cyclical unemployment while permanent layoffs create structural unemployment.