Question:Which of the following is an example of cyclical unemployment?
A.The entry of school leavers into the labour pool each year
B.Lay-offs among agricultural labourers in winter
C.Automation of ticketing services in tourism
D.Recession in the building industry
Answer:D
Rationale: Recession is part of the business cycle: demand for output and jobs falls, and unemployment rises until recovery is well under way. Option A is an example of frictional unemployment; option B of seasonal unemployment; option C of technological unemployment.
Pitfalls: It is easy to confuse cyclical with seasonal unemployment, or frictional unemployment that occurs on a seasonal basis (eg option A). You need to associate cyclical employment firmly with business cycles.