ECONOMICS
BUSINESS CYCLES
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
GDP is rising and unemployment is falling.
|
|
|
GDP is rising and unemployment is rising.
|
|
|
GDP is falling and unemployment is rising.
|
|
|
GDP is falling and unemployment is falling.
|
Detailed explanation-1: -The downswing of the business cycle towards a trough is called an economic contraction. It is associated with: decrease in production/output • increase in unemployment • decrease in wages • decrease in consumer spending.
Detailed explanation-2: -If GDP is falling, then the economy is shrinking-bad news for businesses and workers. If GDP falls for two quarters in a row, that is known as a recession, which can mean pay freezes and lost jobs.
Detailed explanation-3: -A sustained period in which real GDP is rising is an expansion; a sustained period in which real GDP is falling is a recession.
Detailed explanation-4: -A recession is a significant, widespread, and prolonged downturn in economic activity. A common rule of thumb is that two consecutive quarters of negative gross domestic product (GDP) growth mean recession, but many use more complex measures to decide if the economy is in recession.