Cyclical unemployment occurs when
A)individuals enter into the labour market making the rounds of potential employers.
B)individuals with skills no longer valued in the domestic labour market can not find employment.
C)individuals give up the search for employment.
D)a downturn in economic activity reduces employment.

Question

Quizplus · Accepted Answer

Cyclical unemployment is caused by a downturn in economic activity, which reduces demand for goods and services, leading to a decrease in demand for labor and ultimately resulting in unemployment. This type of unemployment is cyclical because it follows the ups and downs of the business cycle, which is the alternating periods of growth and recession in an economy.

Cyclical Unemployment Occurs When