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When the economy is in a recession, many companies must lay off workers, which causes _____ unemployment.

a. Cyclical
b. Structural
c. Frictional
d. Seasonal

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User Joeeee
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Final answer:

a. Cyclical

During a recession, when the economy is in a downturn, many companies may lay off workers, resulting in cyclical unemployment. This type of unemployment is caused by a decrease in demand for goods and services, leading to a decrease in demand for labor. Examples of cyclical unemployment include landscapers being laid off due to a drop in new housing construction and coal miners being laid off due to EPA regulations shutting down coal-fired power plants.

Step-by-step explanation:

In a recession, when the economy is experiencing a downturn, many companies may have to lay off workers. This type of unemployment is known as cyclical unemployment. It occurs when there is a decrease in demand for goods and services, leading to a decrease in demand for labor.

For example, during a recession, if there is a drop in new housing construction, landscapers may be laid off. Similarly, coal miners may be laid off due to EPA regulations that shut down coal-fired power plants. These layoffs are a result of the overall economic decline and are classified as cyclical unemployment.

Seasonal unemployment is another type of unemployment that occurs due to regular seasonal fluctuations in demand for certain industries, such as tourism or agriculture. Frictional unemployment refers to the temporary unemployment that occurs when a person is transitioning between jobs or looking for their first job. Structural unemployment occurs when there is a mismatch between the skills of workers and the available job opportunities.

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User Sudhakar
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