Cyclical unemployment occurs in the recessionary phase of the business cycle.

Question

Quizplus · Accepted Answer

Cyclical unemployment is a type of unemployment that occurs as a result of a downturn in the business cycle. Specifically, it is caused by a recession or economic downturn when businesses reduce production and lay off workers, leading to a decrease in aggregate demand and lower economic activity. Therefore, cyclical unemployment is most commonly associated with the recessionary phase of the business cycle.

Cyclical Unemployment Occurs in the Recessionary Phase of the Business