ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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higher unemployment
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lower inflation (deflation)
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both a & b
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None of the above
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Detailed explanation-1: -When an economy enters into contraction, real gross domestic product (GDP) growth slows and unemployment rises. A contraction often leads to economic hardship for many people.
Detailed explanation-2: -A recession, sometimes called a contraction, is a period of economic slowdown and is often marked by high rates of unemployment, plunging stock prices, lower corporate profitability, and consumer anxiety.
Detailed explanation-3: -A contraction is a period when economic output declines. During this phase, the economy is producing fewer goods and services than it did before. When fewer goods and services are produced, fewer resources are used by firms-including labor.
Detailed explanation-4: -The NBER defines a recession as a period between a peak and a trough in the business cycle where there is a significant decline in economic activity spread across the economy that can last from a few months to more than a year.