Question
Consider the following types of unemployment: Â
Frictional Unemployment Structural Unemployment Cyclical Unemployment Which type of unemployment is primarily caused by economic downturns and recessions?ÂSolution
- Cyclical Unemployment (3): Occurs due to economic downturns and recessions , when demand falls, leading to job losses.Â
- Frictional Unemployment (1): Happens when people switch jobs or enter the workforce .Â
- Structural Unemployment (2): Occurs when skills do not match job requirements , due to technological changes or industry decline.Â
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