What type of unemployment is caused by a decrease in economic activity?

Cyclical unemployment arises directly from fluctuations in the economic cycle. When there is a decrease in economic activity, such as during a recession, businesses often reduce production and, as a result, may lay off workers. This type of unemployment is closely tied to the overall health of the economy; when the economy is thriving, cyclical unemployment tends to decrease, while during downturns, it rises.

In contrast, structural unemployment is caused by shifts in the economy that result in a mismatch between workers' skills and the needs of employers, such as technological changes or changes in consumer demand. Frictional unemployment occurs when individuals are temporarily between jobs or are entering the workforce for the first time, highlighting the natural turnover in the job market. Seasonal unemployment is related to predictable seasonal patterns in employment, such as agricultural or retail jobs that vary with seasons or holidays.

Therefore, cyclical unemployment is specifically linked to broader economic conditions, making it the most appropriate answer to the question about unemployment resulting from decreased economic activity.