What type of unemployment is caused by changes in the overall economy?

Cyclical unemployment is directly related to the fluctuations in the overall economy. It occurs during periods of economic downturn or recession when there is a decrease in demand for goods and services, leading to layoffs and job losses. Businesses may reduce their workforce as they experience lower revenues, which specifically affects the supply of labor available in the economy. This type of unemployment rises during economic declines and falls as the economy recovers, demonstrating its close ties to the business cycle.

The other types of unemployment mentioned can be caused by various factors unrelated to the overall economic conditions. Frictional unemployment occurs when individuals are temporarily between jobs or are entering the workforce, typically due to personal reasons or the time taken to find the right job. Seasonal unemployment happens in specific industries during off-peak times of the year, such as agriculture or tourism, where jobs are available only in certain seasons. Structural unemployment arises from changes in the economy that create a mismatch between the skills workers have and the skills needed for available jobs, which may be affected by technology, globalization, or shifts in consumer preferences. While these other types of unemployment reflect different causes, cyclical unemployment distinctly captures the impact of overall economic trends.