Unemployment that occurs during recessions and depressions are called as _________.

Question

Question

This question was previously asked in

SSC GD Constable (2024) Official Paper (Held On: 22 Feb, 2024 Shift 2)

Answer 1

The correct answer is Cyclical unemployment

Key Points

Cyclical unemployment occurs when there is a lack of demand for goods and services in the economy, leading to a reduction in production and, consequently, a reduction in the workforce.
This type of unemployment is directly related to the economic cycle of growth and recession.
During periods of economic downturns such as recessions and depressions, cyclical unemployment tends to increase as companies reduce their output and lay off workers.
It contrasts with other types of unemployment such as frictional, structural, and seasonal unemployment, which are not directly tied to the economic cycle.

Additional Information

Disguised unemployment refers to a situation where more people are employed than actually needed, often seen in agricultural sectors in developing countries.
Frictional unemployment occurs when workers are temporarily between jobs or are searching for new ones.
Seasonal unemployment occurs when people are unemployed at certain times of the year when demand for labor is lower, such as agricultural workers during the off-season.
Structural unemployment happens when there is a mismatch between the skills of the workforce and the needs of the industry.