Question : ______ Unemployment occurs with changes in economic activity over the business cycle.
Option 1: Frictional
Option 2: Cyclical
Option 3: Structural
Option 4: Technological
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Correct Answer: Cyclical
Solution : The correct option is Cyclical .
Cyclical unemployment is a result of fluctuations in economic activity throughout the business cycle. The business cycle, depicting the periodic expansion and contraction of an economy, influences employment dynamics. During upswings, employment increases and unemployment declines.
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