The demand for new motor vehicles falls when the economy enters a downturn and as a result, motor vehicle manufacturers sack some workers. This would be an example of:

Question

Quizplus · Accepted Answer

The situation described is an example of cyclical unemployment. Cyclical unemployment occurs when there is a downturn in the economy or a recession, which leads to a decrease in demand for goods and services. This, in turn, causes firms to reduce production and lay off workers. In this case, the decrease in demand for new motor vehicles is leading to job losses in the industry.

The Demand for New Motor Vehicles Falls When the Economy