Delciate
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Hey all,

so i've been going over macroeconomics in preparation for the exams coming up soon (10 more days! *faints*)

I'm a bit confused over the difference between cyclical and classical unemployment. The way my book explains it, it seems to be that cyclical unemployment is a form of classical unemployment..?

Is that right or am I missing something?

Thanks!
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LukeisKwl
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(Original post by Delciate)
Hey all,

so i've been going over macroeconomics in preparation for the exams coming up soon (10 more days! *faints*)

I'm a bit confused over the difference between cyclical and classical unemployment. The way my book explains it, it seems to be that cyclical unemployment is a form of classical unemployment..?

Is that right or am I missing something?

Thanks!
There are 4 main types of unemployment
- Cyclical (demand deficient)
- Frictional (between jobs)
- Seasonal (ice cream man)
- Structural (sectors being cut out from the economy such as the miners in britain by Margaret Thatcher)

I think you're getting confused about using the Keynesian graph to represent a decrease in AD. A demand deficit can be brought about by a recession & deflation/disinflation, therefore the government would use fiscal or monetary policies to increase AD and correct the issue.

Dunno if this helped...
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srs23
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Yes you're right, cyclical is a type of classical unemployment which takes place at equilibrium
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