Cyclical unemployment occurs when the economy slows down and some mid-level managers, for example, are laid off.

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Cyclical unemployment is caused by a decline in economic activity, often due to a recession or economic downturn. During this time, businesses may need to lay off workers, such as mid-level managers, in order to cut costs and stay afloat. This leads to a rise in unemployment, which is considered cyclical because it is tied to the business cycle of expansion and contraction.

Cyclical Unemployment Occurs When the Economy Slows Down and Some