The demand for refrigerators falls when the economy enters a downturn. If a refrigerator manufacturer lays off workers during an economic downturn, this would be an example of
A) frictional unemployment.
B) natural unemployment.
C) structural unemployment.
D) cyclical unemployment.

Question

Quizplus · Accepted Answer

The decrease in demand for refrigerators during an economic downturn is a cyclical cause of unemployment. The layoffs are a result of the manufacturer's need to adjust to the decrease in demand and are therefore an example of cyclical unemployment.

The Demand for Refrigerators Falls When the Economy Enters a Downturn