Asked by Vaishnavi Surnis on Jul 15, 2024
Verified
Changes in the products for which a nation has a comparative advantage create sectoral shocks leading to an increase in frictional unemployment.
Comparative Advantage
The ability to produce a good at a lower opportunity cost than another producer
Sectoral Shocks
Unexpected events that cause significant shifts in demand or supply in a specific sector of the economy, leading to changes in prices and output levels.
Frictional Unemployment
Unemployment due to the time workers spend in job search, usually short-term and occurring when individuals are transitioning between jobs.
- Understand the impact of sectoral shocks and technological changes on labor markets and unemployment.
Verified Answer
LR
Laura RovakJul 20, 2024
Final Answer :
True
Explanation :
Sectoral shocks, which occur when changes in market conditions or economic policies affect some sectors of the economy differently than others, can lead to an increase in frictional unemployment. This happens as workers transition between jobs or industries, adjusting to the new areas where their nation now has a comparative advantage.
Learning Objectives
- Understand the impact of sectoral shocks and technological changes on labor markets and unemployment.