The type of unemployment that occurs when a worker is laid off due to insufficient demand for goods and services is known as unemployment. (Enter one word)

The type of unemployment that occurs when a worker is laid off due to insufficient demand for goods and services is known as cyclical unemployment.

Cyclical unemployment is primarily linked to the economic cycle of expansion and contraction. During periods of economic downturn or recession, companies experience reduced demand for their products or services, which often leads to layoffs. This type of unemployment is in contrast to frictional unemployment, which occurs when workers are transitioning between jobs, and structural unemployment, which results from changes in the economy that create a mismatch between skills and job requirements. Cyclical unemployment is a critical indicator of economic health, and addressing it often requires governmental intervention to stimulate demand and encourage economic recovery.