In macroeconomic theories of national- income determination, short- run changes in real GDP are typically associated with changes in unemployment.

Question

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Cyclical unemployment refers to the fluctuations of unemployment rates that are directly correlated with swings in economic activity. As real GDP increases, firms hire more workers leading to a decrease in unemployment. As real GDP decreases, firms lay off workers leading to an increase in unemployment. Therefore, short-run changes in real GDP are typically associated with changes in cyclical unemployment.

In Macroeconomic Theories of National- Income Determination, Short- Run Changes