Questions: Which of the following statements is TRUE? Job training programs can increase structural employment. Unemployment benefits do not increase unemployment rates. Creative destruction occurs only at the level of the firm. Cyclical unemployment is unemployment correlated with the business cycle.

The answer is Cyclical unemployment is unemployment correlated with the business cycle.

This statement is incorrect. Job training programs are typically designed to reduce structural unemployment by equipping workers with the skills needed for available jobs, thereby decreasing the mismatch between workers' skills and job requirements.

This statement is debatable and context-dependent. Some economic theories suggest that generous unemployment benefits can increase unemployment rates by reducing the incentive for job seekers to find new employment quickly. However, other theories argue that these benefits provide necessary support during job transitions and do not significantly impact overall unemployment rates.

This statement is incorrect. Creative destruction, a concept popularized by economist Joseph Schumpeter, refers to the process by which new innovations lead to the demise of outdated industries and economic structures. It can occur at various levels, including industries, markets, and entire economies, not just at the firm level.

This statement is true. Cyclical unemployment is directly related to the fluctuations in the business cycle. During periods of economic downturns or recessions, cyclical unemployment rises as demand for goods and services decreases, leading to layoffs and reduced hiring. Conversely, during periods of economic expansion, cyclical unemployment tends to decrease.