Question

Which of the following is an example of cyclical unemployment? Select the correct answer below: A donut shop laid off workers because their donuts are no longer as popular as they were prior to another donut shop opening across town. Ronald is laid off by his company as part of company reorganization to cut costs to meet slowing demand in the economy. Rohit quit his job because he wants to find a more suitable job for his skills and education. Marcel took family leave to care for his ill parent

Answer 1

Answer:

Ronald is laid off by his company as part of company reorganization to cut costs to meet slowing demand in the economy.

Explanation:

Cyclical unemployment is unemployment that results when the economy is slowing down, or in recession, which means that the aggregate demand, or the production of goods and services, is not high enough to support full employment. As a result, some people who were employed are laid off, and others, who are unemployed, want to work, and are actively looking for work, cannot find employment.

In the question we have an example of cyclical unemployment because Ronald was laid off when the company he worked for was forced to do so due to adverse external economic conditions (slowing demand).