Cyclical unemployment is most closely associated with
Correct answer: A. A downturn in overall economic activity
- A. A downturn in overall economic activity
- B. A mismatch between skills and vacancies
- C. The normal process of changing jobs
- D. Seasonal changes in labour demand
Explanation
Cyclical unemployment rises when aggregate demand and production fall during an economic downturn. Skill mismatch is structural unemployment, while job search between positions is frictional unemployment.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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