The cost of cyclical unemployment is also called:

Question

Quizplus · Accepted Answer

Cyclical unemployment is the difference between actual output and potential output, which is also called the output gap. The cost of cyclical unemployment is the reduction in potential output, which is the difference between potential output and actual output, also known as the output gap. Therefore, the correct answer is D, potential output minus actual output. A, B, and C are not correct because they do not accurately describe the cost of cyclical unemployment.

The Cost of Cyclical Unemployment Is Also Called