When unemployment rises above the natural rate it reflects the existence of ____ unemployment.
A)frictional
B)structural
C)seasonal
D)cyclical

Question

When unemployment rises above the natural rate it reflects the existence of ____ unemployment.
A)​frictional
B)​structural
C)​seasonal
D)​cyclical

Quizplus · Accepted Answer

When unemployment rises above the natural rate, it reflects the existence of cyclical unemployment. This type of unemployment is associated with fluctuations in the business cycle and occurs because of a lack of demand for labor during a downturn or recession. Unlike frictional or structural unemployment, which are longer-term issues, cyclical unemployment is temporary and tends to disappear as the economy recovers.

When Unemployment Rises Above the Natural Rate It Reflects the Existence