Cyclical unemployment is caused by: MCQ with Answer and Explanation

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Cyclical unemployment is caused by:

A. seasonal changes

B. lack of aggregate demand during economic downturns

C. trade union pressure

D. mismatch of skills

Answer: Option B

Solution (By JKSSB Mock Tests)

Cyclical unemployment is caused by deficient aggregate demand during recessions.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The Liquidity Adjustment Facility of the RBI includes:

A. Currency printing and open market operations

B. Repo and reverse repo

C. Bank rate and MSF

D. CRR and SLR

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Correct Answer: Option B

Explanation:
The Liquidity Adjustment Facility comprises repo and reverse repo operations.

This question belongs to: Economy GK Economy Set 1

Question #2

The concept of 'Circular Flow of Income' is associated with:

A. Microeconomics

B. Development economics only

C. International economics

D. Macroeconomics

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Correct Answer: Option D

Explanation:
The circular flow of income is a macroeconomic concept that shows the continuous movement of goods, services and money between households, firms, government and the external sector.

This question belongs to: Economy GK Economy Set 1

Question #3

A sunk cost is a cost that:

A. has already been incurred and cannot be recovered

B. falls as output rises

C. can be recovered easily

D. is equal to marginal cost

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Correct Answer: Option A

Explanation:
A sunk cost has already been incurred and cannot be recovered.

This question belongs to: Economy GK Economy Set 1

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