Which of the following is an example of cyclical unemployment? Select the correct answer: 1. A donut shop laid off workers due to a decrease in popularity caused by a new donut shop opening across town. 2. Ronald was laid off by his company during a reorganization to cut costs in response to an economic slowdown. 3. Rohit quit his job to find a position better suited to his skills and education. 4. Marcel took family leave to care for an ill parent.

The correct answer is 2. Ronald was laid off by his company during a reorganization to cut costs in response to an economic slowdown.

Extra: Cyclical unemployment is directly related to the economic cycle of a country, such as during phases of recession or downturns when demand for goods and services drops. Businesses may then experience lower revenue, leading to cost-cutting measures, including layoffs. Cyclical unemployment increases during recessions and decreases during periods of economic growth. When the economy is doing well, businesses hire more workers, reducing cyclical unemployment.

Looking at the other options in light of this definition: 1. This represents an example of structural unemployment because it's caused by changes in the market that affect the demand for certain skills or businesses. It represents a structural shift in the economy rather than a cyclical downturn. 3. Rohit quitting his job is an example of frictional unemployment, which occurs when workers voluntarily leave their jobs to find better matches or are in between jobs. 4. Marcel's situation is neither cyclical, structural, nor frictional unemployment; it is a personal situation and would be classified differently, possibly counted among those not in the labor force if the leave is extended.