In the short-run macro model,which of the following is the cause of cyclical unemployment?
A) It takes time for people to move to new jobs.
B) Insufficient aggregate spending.
C) It takes time for firms to find new employees.
D) It takes time for people to retrain.
E) Fewer people want to work than before.

Question

Quizplus · Accepted Answer

Cyclical unemployment is caused by insufficient aggregate spending, which leads to a decrease in demand for goods and services. As a result, firms lay off workers, leading to an increase in unemployment.

In the Short-Run Macro Model,which of the Following Is the Cause