Cyclical unemployment occurs when:
A) workers are fired.
B) workers quit their job to raise a family.
C) the economy slows down and workers are laid off.
D) workers retire earlier than age 66.

Question

Quizplus · Accepted Answer

Cyclical unemployment occurs when there is a downturn in the business cycle and businesses reduce production, leading to layoffs and job losses. This is different from other forms of unemployment, such as frictional or structural unemployment, which are caused by factors like workers voluntarily leaving their job or a mismatch between their skills and available jobs. Choices A, B, and D can contribute to other types of unemployment but not cyclical unemployment.

Cyclical Unemployment Occurs When