Structural unemployment is caused by economic progress, change in consumer tastes/preferences, or a fundamental change in the operations of the economy reduces the demand for workers and their skills.

Give 2 examples of what may cause structural unemployment.
Rise of technology and drop in an industry
What do you think can be done in order to reduce structural unemployment?
Equip government training programs to the basic unemployed
Technological unemployment occurs when workers are replaced by machines or automated systems.

How do you think this affects workers?
This replaces workers making them be unemployed and unemployment will rise if machines replace human workers
Which categories of unemployment do you think are the most troublesome for the U.S. Economy? Why?
Cyclical unemplyment because workers lose their joibs because of downturns in the business cycle

Inflation: a rise in the general levels of prices. If inflation occurs, workers need more money to pay for food, clothing and shelter. Interest rates on loans tend to increase.

Causes of inflation: Strong demand, rising costs, wage-price spirals, along with a growing supply of money.

What do you think happens in the following scenarios?
Everything will increase, if food, clothing and shelter prices increases, workers will need an increase in paychech so they will have enough to pay for those
If interest rates increase, what happens to business activity and willingness to borrow money?
Businesses will borrow less and less money if interest rates go up and more busnesses will go out of business
If interest rates on loans increase during inflation, what do you think happens to the purchasing power of consumer savings?

Impact of Government Spending

How does government spending affect the distribution of income?

Discretionary Fiscal Policy is a policy that someone must choose to implement. Requires an action by Congress, the president, or an agency of government to take effect.
Example: A federal expenditure to build a highway or renovate a downtown area in order to offset a decline in business spending. Stimulates consumption.
What will happen to consumption/spending if Government adopts a tax cut?