Which of the following best describes the cause of "cyclical" unemployment?

Question

Quizplus · Accepted Answer

Cyclical unemployment is caused by a drop in overall economic activity, which leads to a decline in demand for goods and services. This, in turn, causes firms to produce less and lay off workers, resulting in higher unemployment. Choice A relates to structural unemployment, B relates to frictional unemployment, and E relates to voluntary unemployment. Choice C is incorrect as a rightward shift in the AD curve would indicate economic growth, which would reduce unemployment.

Which of the Following Best Describes the Cause of "Cyclical