Cyclical unemployment is negative when

Question

Quizplus · Accepted Answer

Cyclical unemployment refers to the fluctuation in unemployment that occurs as a result of changes in the business cycle. During a recession, cyclical unemployment increases as firms reduce production and lay off workers. Conversely, during a business expansion, cyclical unemployment decreases as firms increase production and hire more workers. Therefore, cyclical unemployment is negative (meaning that employment is increasing) when the economy is at the peak of a business expansion, which is choice B.

Cyclical Unemployment Is Negative When