Question

Why would the area cyclical unemployment be more pronounced than say, San Francisco?

Answer 1

This is not the natural rate of unemployment.

The unemployment is cyclical, because it appears along with the business cycle moves. If the economy faces recession, real GDP should fall because the fall in aggregate demands (AD). This makes a loss of revenue earnings of producers and suppliers – since their income decreases they cut shorts their expenses too; they layoff labors, making a cyclical unemployment.

Cyclical unemployment is very obvious or more pronounced, since this is a part of business cycle. If there are noticeable layoffs in an area, like in the area S.F., this is quite sure that cyclical unemployment appears in the economy. The place of S.F. is famous for automobiles, banks, broadcasting, etc. If there is an increasing tendency of termination of jobs of employees, there should be cyclical unemployment.