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UI Post-UTME Economics 2023 (Model questions) Question 14

Question 14

Labour Market

If people are made unemployed because of a fall in aggregate demand, this is known as ________

  1. A.frictional unemployment
  2. B.seasonal unemployment
  3. C.cyclical unemployment
  4. D.structural unemployment
Show the answer and explanation

Answer: C (cyclical unemployment)

Explanation

Unemployment caused by too little aggregate demand is cyclical (demand-deficient) unemployment.