The type of unemployment associated with downturns in the economy is called:
A)frictional unemployment
B)structural unemployment
C)cyclical unemployment
D)seasonal unemployment
E)secular unemployment

Question

Quizplus · Accepted Answer

Cyclical unemployment is associated with downturns in the economy, as it is caused by a decrease in aggregate demand and a subsequent decrease in production levels. This type of unemployment is also known as demand-deficient or Keynesian unemployment, as it is a result of insufficient overall demand for goods and services. Frictional unemployment is caused by workers moving between jobs or entering the labor force, structural unemployment is caused by a mismatch between workers' skills and the available jobs, seasonal unemployment is caused by seasonal changes in demand for labor, and secular unemployment is caused by long-term shifts in the economy, such as changes in technology or demographics.

The Type of Unemployment Associated with Downturns in the Economy