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