Cyclical unemployment exists when
A) frictional and structural unemployment is zero.
B) real national income exceeds potential income.
C) real GDP exceeds potential GDP.
D) real GDP is less than potential GDP.

Question

Quizplus · Accepted Answer

Cyclical unemployment occurs when the economy is not operating at its full capacity, meaning that real GDP is less than potential GDP. This type of unemployment rises during economic downturns and falls when the economy improves.

Cyclical Unemployment Exists When