Cyclical unemployment is closely associated with
A)long-term economic growth.
B)short-run ups and downs of the economy.
C)fluctuations in the natural rate of unemployment.
D)changes in the minimum wage.

Question

Quizplus · Accepted Answer

Cyclical unemployment refers to the fluctuations in unemployment that occur due to short-run ups and downs in the economy. It is caused by changes in aggregate demand and occurs when the economy is in a recession or contractionary period. Therefore, choice B is the correct answer. A is incorrect because cyclical unemployment is not related to long-term economic growth. C is incorrect because the natural rate of unemployment represents the level of unemployment that occurs when the economy is in equilibrium, and it does not fluctuate in the short run. D is incorrect because changes in the minimum wage can affect structural unemployment, but not cyclical unemployment.

Cyclical Unemployment Is Closely Associated with