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Chapter 8: "Q.19" (page 214)

When would you expect cyclical unemployment to be rising? Falling?

Short Answer

Expert verified

Increase during recession and fall during expansion.

Step by step solution

01

Step.1 Introduction 

Unemployment can be defined as the situation when a person who is able to work and is work, is also actively looking for jobs but is not able to find one. The type of unemployment caused by the cyclical fluctuations is known as cyclical unemployment.

02

Step.2 Explanation 

Cyclical unemployment will fall when an economy is doing goods and is in the phase of expansion. Because in the time of expansion the firms will hire a greater number of people. An increase in labor demand would cause rightward shift in the demand curve, increasing employement.

Cyclical unemployment will rise when the economy is not doing good and is in a state of recession. Because at the time of recession the firms will hesitate from hiring people. An decrease in labor demand would cause leftward shift in the demand curve, reducing employement.

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Most popular questions from this chapter

Many college students graduate from college before they have found a job. When graduates begin to look for a

job, they are counted as what category of unemployed?

Using the above data, what is the unemployment rate? These data are U.S. statistics from 2010. How does it compare to the February 2015 unemployment rate computed earlier?

Under what condition would a decrease in

unemployment be bad for the economy?

What criteria do the BLS use to count someone as employed? As unemployed?

What forces create the natural rate of

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