Question : Which of the following unemployment is the result of depression in an economy?
Option 1: Cyclical unemployment
Option 2: Frictional unemployment
Option 3: Seasonal unemployment
Option 4: Structural unemployment
Correct Answer: Cyclical unemployment
Solution : The correct option is Cyclical Unemployment.
The type of unemployment that is the result of a depression or a prolonged economic downturn is called " Cyclical Unemployment ". During a recession or economic depression, businesses may cut back on production, leading to a decline in demand for labour, resulting in job losses and cyclical unemployment.
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