Which of the following types of unemployment is most directly related to real GDP growth?
A) Structural unemployment
B) Seasonal unemployment
C) Frictional unemployment
D) Cyclical unemployment

Question

Quizplus · Accepted Answer

Cyclical unemployment is directly related to real GDP growth as it occurs due to fluctuations in the business cycle. During a recession, real GDP decreases, and firms lay off workers, resulting in increased cyclical unemployment. Conversely, during an expansion, real GDP increases, and firms hire more workers, resulting in reduced cyclical unemployment. Therefore, the level of cyclical unemployment can be an indicator of the health of the overall economy.

Which of the Following Types of Unemployment Is Most Directly