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

Question

Quizplus · Accepted Answer

Cyclical unemployment is directly related to the rate of growth in real GDP. When the economy is growing, cyclical unemployment decreases as more jobs are created. Similarly, during a recession, there is a rise in cyclical unemployment as businesses lay off workers due to decreased demand for their products and services. Therefore, the rate of growth in real GDP is closely tied to the level of cyclical unemployment.

Which of the Following Unemployment Categories Is Most Directly Related