What type of unemployment occurs when a company relocates its operations abroad?

Study for the SQA National 5 Economics Exam. Engage with flashcards and multiple choice questions, each featuring hints and comprehensive explanations. Prepare confidently for your exam!

The correct choice is structural unemployment because it specifically relates to changes in the economy that result in a mismatch between workers' skills and the needs of employers. When a company relocates its operations abroad, it often leads to job losses in the region where the company was based. This type of unemployment arises not due to temporary factors but because of significant shifts such as technology advancements, industry changes, or relocation of production. In this case, the jobs that were once available become permanently unavailable in the local area, often leaving workers without the necessary skills or job opportunities that match their expertise. This long-term impact highlights the essence of structural unemployment.

Other types of unemployment, such as frictional, cyclical, or seasonal, involve different factors. Frictional unemployment occurs when individuals are temporarily unemployed while transitioning between jobs, cyclical unemployment relates to downturns in economic activity, and seasonal unemployment is linked to the time of year or specific seasons impacting job availability. Each of these categories does not directly address the consequences of companies relocating operations like structural unemployment does.

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