Consumer spending drops, and then retail stores reduce orders from factories. Factories reduce production and lay off workers. Fewer jobs are available in the economy until factory orders pick up. Joe loses his factory job. Joe is part of what type of unemployment?

Question

Quizplus · Accepted Answer

Joe's unemployment is cyclical because it is directly related to the downturn in the economy, leading to reduced consumer spending, decreased factory orders, and subsequent layoffs. Cyclical unemployment occurs when there is not enough demand for goods and services in the economy to provide jobs for everyone who wants one.

Consumer Spending Drops, and Then Retail Stores Reduce Orders from Factories