Question

Thousands of people have lost their jobs because the economy is shrinking. This unemployment is an example of _____. Frictional unemployment Cyclical unemployment Seasonal unemployment

Answer 1

Thousands of people have lost their jobs because the economy is shrinking. This unemployment is an example of Cyclical unemployment.

Our economy experiences several ups and downs which goes in cycle, this is what we call cyclical unemployment.  It happens when the economy enters a recession, lots of the jobs lost which are considered cyclical unemployment. This unemployment is very dangerous because it weakens the economy--it is when people aren't working and spending less money.

Answer 2

Thousands of people have lost their jobs because the economy is shrinking. This unemployment is an example of "cyclical unemployment".

Cyclical unemployment is when workers lose their positions in view of downturns in the business cycle. You can tell when the economy decreases by estimating total national output. In the event that the economy contracts for two quarters or more, it's in a recession.  

Cyclical unemployment is impermanent. It relies upon the length of the contraction. A normal recession endures around year and a half. A depression can last ten years.