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4 Phases of the Business Cycle
Mexico is currently in the recession phase of the business cycle. This is because in 2019 the real GDP growth rate was -0.3%, and in 2020 the GDP annual growth rate was -4.5%. This can be largely attributed to the pandemic, but it also shows that Mexico was headed in this direction anyway because of the decline in 2019.
Unemployment
The labor force consists of employees who are unemployed and employed. Unemployment consists of consumers who are not employed and are not working in the private or public sector. Unemployment is calculated by taking the number of consumers who are unemployed and dividing it by the labor force (Rasmussen College, 2020).
Different Types of Unemployment
The type of unemployment that has the greatest impact on Mexico is structural. This is mainly because of the few advancement opportunities available. It can also be attributed to low real wages, high underemployment, and inequitable income distribution.
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