Cyclical unemployment in an economy will be zero when:
A)there is an expansionary gap in the economy.
B)the economy is producing its natural rate of output.
C)there is a recessionary gap in the economy.
D)the actual price level is equal to the expected price level in the economy.
E)the actual price level exceeds the expected price level in the economy.

Question

Quizplus · Accepted Answer

Cyclical unemployment occurs when there is a deviation from the natural rate of unemployment due to business cycle fluctuations. When the economy is producing its natural rate of output, there is no cyclical unemployment because there is no output gap.

Cyclical Unemployment in an Economy Will Be Zero When