The type of unemployment that occurs because of a recession is called Cyclical unemployment.
What is meant by cyclical unemployment?
- Unemployment that is cyclically influenced by economic cycles or industry trends is known as cyclical unemployment. Cyclical unemployment will be at its lowest while an economy is doing well and at its highest when the growth of the economy starts to slow down.
- Cyclical unemployment is connected to an industry's business cycle. It is a direct effect of a decline in consumer demand that caused a drop in the demand for labor.
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