Question

Suppose that the economy enters into a recession and​ that, as a​ result, Rusty Z. Wrench loses his job as a delivery truck mechanic and remains unemployed. When the economy​ recovers, Rusty's previous employer rehires him. What is the best classification for his time as an unemployed truck​ mechanic?

Answer 1

Rusty is cyclically unemployed.

Step-by-step explanation:

Rusty Z. Wrench loses his job as a delivery truck mechanic and remains unemployed when the economy enters into a recession. When the economy recovers, Rusty is rehired.

Here, unemployment is being caused by the business cycle so we will classify it as cyclical unemployment.

Cyclical unemployment can be defined as the unemployment that is caused due to fluctuations in the economy or business cycles.