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    Economics A-Level

    Cyclical unemployment

    What Cyclical unemployment means in Economics A-Level, as defined for AQA.

    Definitions of Cyclical unemployment

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    Reference: AQA

    Unemployment linked to the economic cycle, rising during recessions when aggregate demand falls and firms lay off workers to cut costs.
    AQA · Employment and unemployment
    Rises with a negative output gap as firms need fewer workers, which reduces wage demands and leads to lower inflationary pressures.
    AQA · Possible conflicts between macroeconomic policy objectives
    Increases when aggregate demand falls during a recession as firms reduce output and require fewer workers.
    AQA · Employment and unemployment
    Unemployment caused by deficient demand, as lower aggregate demand reduces the derived demand for labour.
    AQA · Employment and unemployment

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