What term is given to unemployment caused by a downturn in the business cycle ?
Correct answer: D. Cyclical unemployment
- A. Underemployment
- B. Disguised unemployment
- C. Temporary unemployment
- D. Cyclical unemployment
Explanation
A downturn in the business cycle reduces production and the demand for labour, creating cyclical unemployment. Underemployment and disguised unemployment describe other forms of inadequate employment, not the business-cycle cause.
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About Macroeconomics
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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