The country of Trevanvia goes through a period of recession, which leaves a large number of people unemployed due to extensive layoffs by companies. The companies use the strategy of job termination to cut down their costs and reduce their output as the people are now more cautious with their spending. In the given scenario, the layoffs that take place exemplify _____.
A)seasonal unemployment
B)structural unemployment
C)frictional unemployment
D)cyclical unemployment

Question

Quizplus · Accepted Answer

The layoffs due to recession and decrease in demand are an example of cyclical unemployment, which is caused by fluctuations in the business cycle.

The Country of Trevanvia Goes Through a Period of Recession