The primary factor leading to cyclical unemployment is when
A) the level of overall economic activity fluctuates.
B) businesses often discriminate in their hiring practices on the basis of age, sex, and race.
C) workers quit their jobs in order to look for higher paying employment.
D) some workers do not have marketable job skills.

Question

Quizplus · Accepted Answer

Cyclical unemployment is caused by fluctuations in the overall level of economic activity in the economy. When there is a downturn, businesses may lay off workers or reduce their hours, leading to higher unemployment rates. As the economy improves, businesses may start hiring again, reducing unemployment. Factors such as discrimination, worker choice, and skills mismatches may contribute to structural or frictional unemployment, but they are not the primary factors leading to cyclical unemployment.

The Primary Factor Leading to Cyclical Unemployment Is When