Paper 3 · Population and Labour
Unemployment caused by a general fall in aggregate demand during a recession is called ... unemployment.
Model answer
cyclical
Also accepted: demand deficient, demand-deficient, cyclical unemployment
Explanation: It is called cyclical, or demand deficient, unemployment because it rises and falls with the business cycle. Firms facing weak demand cut output and lay workers off, and the remedy is a policy that raises aggregate demand again.
Derived from ZIMSEC Economics 4050/3 Paper 3, June 2023, Q2