Which type of unemployment increases during a recession?
A) frictional unemployment
B) the natural unemployment rate
C) cyclical unemployment
D) structural unemployment

Question

Quizplus · Accepted Answer

Cyclical unemployment increases during a recession because of a decrease in demand for goods and services, resulting in a decrease in demand for workers. This is in contrast to frictional unemployment (temporary unemployment due to job searching or matching) and structural unemployment (long-term unemployment due to a mismatch of skills or lack of available jobs) which are caused by factors outside the business cycle. The natural unemployment rate is the sum of frictional and structural unemployment, and is not affected by the business cycle.

Which Type of Unemployment Increases During a Recession