ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Real gross domestic output falls
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Unemployment rate falls
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Production increase
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Personal income increases
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Detailed explanation-1: -This usually results in job losses and an increase in the unemployment rate. While there is no single definition of recession, it is generally agreed that a recession occurs when there is a period of reduced output and a significant increase in the unemployment rate.
Detailed explanation-2: -During economic downturns an economy’s output of goods and services declines.
Detailed explanation-3: -In particular, a recession is usually associated with a decline of 2 percent in GDP. In the case of severe recessions, the typical output cost is close to 5 percent. The fall in consumption is often small, but both industrial production and investment register much larger declines than that in GDP.
Detailed explanation-4: -When GDP declines during a recession, growth in real consumption and investment spending both decline; unemployment rises sharply.