LOS a: Describe how structural economic changes (e.g., demographics, technology, politics, and regulation) may affect industries.

Q1. Which of the following is the best example of a structural change as opposed to a cyclical change?

A)   The average age of consumers increasing.

B)   The European Central Bank raises interest rates to ward off inflation.

C)   Increased spending from an increase in consumer confidence.

Q2. When the government reallocates spending based upon a decision to promote new and developing industries, this would be categorized as:

A)   monetary policy.

B)   a structural change.

C)   a cyclical change.

Q3. Technological changes are most likely to result in which of the following effects? Evolving technology is likely to result in changes in:

A)   educational curriculum and the relative demand for various products.

B)   educational curriculum only.

C)   the relative demand for various products only.

LOS a: Describe how structural economic changes (e.g., demographics, technology, politics, and regulation) may affect industries. fficeffice" />

Q1. Which of the following is the best example of a structural change as opposed to a cyclical change?

A)   The average age of consumers increasing.

B)   The European Central Bank raises interest rates to ward off inflation.

C)   Increased spending from an increase in consumer confidence.

Correct answer is A)

A change in the average age of consumers is a demographic change, which is considered a structural change. Changes in spending based upon confidence and pessimism is generally considered a cyclical phenomena, as is a central bank action.

Q2. When the government reallocates spending based upon a decision to promote new and developing industries, this would be categorized as:

A)   monetary policy.

B)   a structural change.

C)   a cyclical change.

Correct answer is B)

Structural changes include government activity, such as changes in spending and regulations that are designed to promote or inhibit specific economic activities.

Q3. Technological changes are most likely to result in which of the following effects? Evolving technology is likely to result in changes in:

A)   educational curriculum and the relative demand for various products.

B)   educational curriculum only.

C)   the relative demand for various products only.

Correct answer is A)

If technological changes result in changes in the set of skills required of workers, this is likely to lead to changes in educational curriculum (and possibly delivery). Such changes often result in the production and demand for new or different products.

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