Final answer:
Cyclical unemployment is highest during a recession, as decreased economic demand leads to lower sales and profit, causing firms to lay off workers. Government policies that stimulate buying power can help reduce cyclical unemployment by encouraging firms to hire.
Step-by-step explanation:
Cyclical unemployment is likely to be highest during a(n) recession. Cyclical unemployment occurs when there is not enough demand in the economy for all workers who wish to work at current wage levels. During recessions, the overall buying power in the economy is diminished, sales and profits decline, and firms lay off workers because they do not perceive opportunities for profit.
As a result, cyclical unemployment rises. Government efforts to stimulate the economy and increase demand can help reduce cyclical unemployment by making firms more confident in their sales and profit prospects, thereby encouraging them to hire more employees.