Suppose the official unemployment rate increases due to a downturn in the overall economy.What type of unemployment would be responsible for this increase?
A) seasonal
B) cyclical
C) structural
D) frictional

Question

Suppose the official unemployment rate increases due to a downturn in the overall economy.What type of unemployment would be responsible for this increase?  
A) seasonal 
B) cyclical 
C) structural 
D) frictional

Quizplus · Accepted Answer

Cyclical unemployment occurs during downturns or recessions in the overall economy, as businesses lay off workers and reduce production in response to lower demand. Therefore, an increase in the official unemployment rate during a downturn would be primarily due to cyclical unemployment.  Seasonal unemployment occurs due to seasonal variations in demand for certain types of labor, such as agricultural labor. Structural unemployment occurs when industries or job types become obsolete, while frictional unemployment occurs due to normal turnover and job search processes.

Suppose the Official Unemployment Rate Increases Due to a Downturn