Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It leads to an increase in consumer spending, stimulating economic growth.
B
It results in higher government spending on social welfare programs.
C
It causes a decrease in the availability of skilled labor in the market.
D
It has no significant impact on economic trends.
Understanding the Answer
Let's break down why this is correct
Answer
Cyclical unemployment occurs when there is not enough demand for goods and services in the economy, often during a recession. This type of unemployment can lead to a decrease in consumer spending, as people who are unemployed tend to spend less money. As spending drops, businesses may see lower sales, which can lead to further layoffs and a cycle of rising unemployment. For example, if a factory cuts jobs due to falling demand for its products, the laid-off workers will spend less in their communities, affecting local shops and services. Overall, cyclical unemployment can slow down economic growth and create a challenging environment for the labor market, making it harder for people to find jobs.
Detailed Explanation
Cyclical unemployment happens when the economy slows down. Other options are incorrect because Some might think that more unemployment means people spend more money; It's a common belief that unemployment reduces skilled workers.
Key Concepts
cyclical unemployment
economic impact of unemployment
labor market trends
Topic
Unemployment and Labor Force Dynamics
Difficulty
hard level question
Cognitive Level
understand
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