Cyclical unemployment occurs when
A) individuals enter into the labor market making the rounds of potential employers.
B) individuals with skills no longer valued in the labor market cannot find employment.
C) individuals give up the search for employment.
D) a business cycle recession decreases employment.

Question

Quizplus · Accepted Answer

Cyclical unemployment is directly related to the level of economic activity in the business cycle. It increases during a recession when there is a decrease in demand, leading to a reduction in production and thus, employment.

Cyclical Unemployment Occurs When