Lefrada, a luxury watchmaker, stops production for three months and lays off 30 employees because of a sharp decline in its sales during the period of recession. In the given scenario, the laid off employees are facing _____.
A) seasonal unemployment
B) structural unemployment
C) frictional unemployment
D) cyclical unemployment

Question

Quizplus · Accepted Answer

The laid-off employees are facing cyclical unemployment, which occurs due to a downturn in the economy, such as a recession, leading to reduced demand for goods and services and consequently, layoffs.

Lefrada, a Luxury Watchmaker, Stops Production for Three Months and Lays