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Keynesian unemployment is also known as "demand-deficient unemployment" or "cyclical unemployment," as it is often caused by a downturn in real economic activity (a recession or economic crisis).

It is different from "structural unemployment," which is caused by a mismatch between the skills and requirements of workers and the needs of employers, or "frictional unemployment," which is caused by the normal flow of people entering and leaving the labor market.

Keynesian economics emphasises the role of active government intervention in addressing unemployment, and suggests that fiscal policy measures such as increasing government spending or lowering taxes can help to stimulate demand and reduce unemployment. Monetary policy might also be used to stimulate demand and create new jobs.