Question

difference between cyclical and structural unemployment

Answer 1

Hey Naina,

Cyclical or Keynesian unemployment is known as demand deficient unemployment, occurs when there is not enough combined demand in the economy. This is caused by a business cycle recession and salary not falling to meet the equilibrium rate. On the other hand, structural unemployment is long-term and chronic unemployment arises from imbalance between the skills and other uniqueness of workers in the market and the needs of employers.

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