What type of unemployment is caused by economic downturns?

Practice Questions

Q1
What type of unemployment is caused by economic downturns?
  1. Frictional unemployment
  2. Structural unemployment
  3. Cyclical unemployment
  4. Seasonal unemployment

Questions & Step-by-Step Solutions

What type of unemployment is caused by economic downturns?
  • Step 1: Understand what unemployment means. It is when people who want to work cannot find jobs.
  • Step 2: Learn about different types of unemployment. There are several types, including cyclical, structural, and frictional unemployment.
  • Step 3: Focus on cyclical unemployment. This type happens when the economy is not doing well.
  • Step 4: Recognize that during economic downturns, people buy fewer goods and services.
  • Step 5: Understand that when demand for goods and services decreases, companies may need to lay off workers.
  • Step 6: Conclude that cyclical unemployment is specifically caused by these economic downturns.
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