Which type of unemployment is caused by a decline in aggregate demand during economic downturns?
Cyclical
Cyclical unemployment arises due to fluctuations in the business cycle, particularly during periods of recession or economic slowdown.
When aggregate demand in the economy falls, firms cut back on production and reduce their workforce, leading to a rise in unemployment.
This is different from seasonal unemployment (caused by seasonal changes in demand) and structural unemployment (caused by mismatch between skills and available jobs), while voluntary unemployment occurs when a person chooses not to work.
Hence, unemployment caused by a decline in aggregate demand during economic downturns is cyclical unemployment.
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Important Questions from Microeconomics
Which of the following statement is correct?
I. Indifference curves are sloping from left to right.
II. Higher indifference curve gives a higher level of utility.
Match List I with List II:
List- I
Shape of revenue curve of the firm
List – II
Market structure
A.
Kinked revenue-curve (I)
Monopolistic competition B.
Infinitely elastic straight line curve (II)
Perfect competition C.
Relatively less elastic curve (III)
Oligopoly D.
Relatively high elastic curve (IV)
Monopoly.
Choose the correct answer from the options given below -Marginal revenue of a firm is constant throughout under _________.
The cost curve which is a rectangular hyperbola is:
Rare of inflation is equal to:
[A = Price Index]
