Question13 Which of the following is an example of cyclical unemployment? A worker quits her job to find a better job. A worker loses his job because he failed the macro exam. A worker is unemployed because the cost of finding a job in another city is too high. A worker loses her job because the minimum wage increases substantially. A worker loses her job because the economy begins to enter a recession. ResetMaximum marks: 1 Flag question undefined

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BlackTom AI · Accepted Answer

Question context: identifying cyclical unemployment among several scenarios.
Option 1: 'A worker quits her job to find a better job.' This is best described as frictional unemployment, where the individual is temporarily between jobs while searching for a more suitable opportunity. It does not stem from a downturn in the overall economy.
Option 2: 'A worker loses his job because he failed the macro exam.' This appears to be an individual performance-related setback rather than a macroeconomic cycle effect. It does not illustrate cyclical unemployment driven by aggregate demand or recessionary pressures.
Option 3: 'A worker is unemployed because the cost of finding a job in another city is too high.' This embodies search costs or geographical frictions, which are components of frictional unemployment, not cyclical unemployment tied to economic downturns.
Option 4: 'A worker loses her job because the minimum wage increases substantially.' While higher minimum wages can contribute to structural or classical unemployment by creating a wage floor that surpasses the value of some jobs, this is not describing a broad economic downturn; it aligns more with structural/classical considerations than with cyclical effects.
Option 5: 'A worker loses her job because the economy begins to enter a recession.' This scenario reflects a decline in overall economic activity leading to layoffs across multiple firms, which is the textbook definition of cyclical unemployment caused by insufficient demand in the economy.
In summary, the root cause of cyclical unemployment is a weak economy and reduced aggregate demand, which is captured in Option 5, while the other options describe frictional, structural, or isolated (non-cyclical) factors that do not reflect the macroeconomic cycle influencing unemployment.

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