Unemployment that occurs during recessions and depressions are called as _______________ .
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Cyclical unemployment.
- Cyclical unemployment is the type of unemployment that happens during recessions and depressions.
- The economic cycle is connected to this kind of unemployment, which increases during recessions when a decline in the demand for products and services results in job losses.
- Businesses may lay off employees in response to declining sales, which would raise the unemployment rate. Implementing policies meant to stabilise the economy during downturns requires an understanding of cyclic unemployment.