Cyclical unemployment rises and falls with fluctuations in the macroeconomy.

Question

Quizplus · Accepted Answer

Cyclical unemployment is caused by changes in the business cycle, which is the fluctuation of economic activity that occurs over time. During periods of expansion, businesses tend to hire more workers, resulting in lower levels of unemployment, while during periods of recession, businesses tend to lay off workers, resulting in higher levels of unemployment. Therefore, cyclical unemployment rises and falls with fluctuations in the macroeconomy.

Cyclical Unemployment Rises and Falls with Fluctuations in the Macroeconomy