If the economy enters a recession,
A) frictional unemployment increases.
B) structural unemployment decreases.
C) the number of workers on layoff decreases.
D) cyclical unemployment increases.

Question

Quizplus · Accepted Answer

During a recession, there is a slowdown in economic activity, leading to declines in production and employment. This cyclical downturn leads to an increase in cyclical unemployment, which is a type of unemployment that results from fluctuations in economic activity. Frictional unemployment and structural unemployment are both types of unemployment that are not directly related to economic downturns, so they are unlikely to change significantly during a recession. The number of workers on layoff may increase during a recession, as firms may cut back on staffing levels, but this is not a defining characteristic of a recession.

If the Economy Enters a Recession