ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Cyclical unemployment is a type of unemployment where labor forces are reduced as a result of business cycles or fluctuations in the economy, such as recessions (periods of economic decline). When the economy is at its peak or experiences continuous growth, the rate of cyclical unemployment is low.

Detailed explanation-2: -Cyclical unemployment is the impact of economic recession or expansion on the total unemployment rate. Cyclical unemployment generally rises during recessions and falls during economic expansions and is a major focus of economic policy.

Detailed explanation-3: -Effects of Cyclical Unemployment. The effect of cyclical unemployment can become self-fulfilling. When driven by falling demand, companies lay off workers and reduce investment. In turn, demand falls further and businesses can become less efficient due to failing to invest in productive capital.

Detailed explanation-4: -Cyclical unemployment refers to the unemployment which is caused by the changes in business cycles, that is economic upturn or downturn. Cyclical unemployment is a component of overall unemployment and is affected by the economic recession or expansion.

Detailed explanation-5: -Large-scale job loss: When consumers demand fewer goods and services, companies have less need for their labor force, leading to layoffs across industries. Decreased spending: In cyclical unemployment when consumer confidence is low, buyers usually hold off on making purchases, especially large ones like buying a home.