Assuming the economy is at full employment,a decrease in aggregate demand will most likely cause a change in which of the following types of unemployment?
A)Seasonal.
B)Cyclical.
C)Frictional.
D)Structural.

Question

Quizplus · Accepted Answer

A decrease in aggregate demand would lead to a decrease in production and sales, causing firms to lay off workers. This type of unemployment is known as cyclical unemployment, which occurs due to fluctuations in the business cycle. However, this assumes the economy was at full employment initially.

Assuming the Economy Is at Full Employment,a Decrease in Aggregate