When the economy is experiencing a contraction, there is an increase in

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During a contraction phase of the business cycle, there is a decrease in demand for goods and services, leading to a slowdown in economic activity. This, in turn, leads to a decrease in demand for labor, resulting in layoffs and job losses. This type of unemployment is called cyclical unemployment. Frictional unemployment refers to individuals who are between jobs or have just entered the workforce. Structural unemployment occurs when there is a mismatch between the skills of the workforce and the demands of the job market. Seasonal unemployment, as the name suggests, is associated with jobs that are seasonal in nature, such as farming or tourism.

When the Economy Is Experiencing a Contraction, There Is an Increase