ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Cyclical
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Structural
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Frictional
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Seasonal
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Detailed explanation-1: -And when economic activity is low, firms reduce their workforce and unemployment rises. In that sense, unemployment is countercyclical, meaning it rises when economic growth is low and vice versa. But unemployment does not fall in lockstep with an increase in growth.
Detailed explanation-2: -Okun’s law looks at the statistical relationship between a country’s unemployment and economic growth rates. Okun’s law says that a country’s gross domestic product (GDP) must grow at about a 4% rate for one year to achieve a 1% reduction in the rate of unemployment.
Detailed explanation-3: -Leading indicator examples include the Consumer Confidence Index, Purchasing Managers’ Index, initial jobless claims, and average hours worked.
Detailed explanation-4: -A recession is a decline in total output, unemployment rises and inflation falls. 3.