ECONOMICS
ECONOMIC GROWTH
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Unemployment is likely to fall
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Prices are likely to fall
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Demand is likely to fall
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Imports are likely to fall
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Detailed explanation-1: -An economic boom is an often-short-lived period of rapid growth of real GDP resulting in lower unemployment, accelerating inflation rate and rising asset prices. A boom occurs when real GDP is expanding much faster than the estimated trend rate of growth and this can lead macroeconomic overheating.
Detailed explanation-2: -Why Unemployment Rises During a Recession. Because a recession is a slowdown in economic activity and labor is a key economic input, along with capital, it is logical that unemployment would rise as output (what companies make and sell) declines as companies making less and selling less need fewer employees.
Detailed explanation-3: -Unemployment is caused by various reasons that come from both the demand side, or employer, and the supply side, or the worker. Demand-side reductions may be caused by high interest rates, global recession, and financial crisis. From the supply side, frictional unemployment and structural employment play a great role.
Detailed explanation-4: -Lower economic growth (GDP) – As fewer people have jobs, firms won’t be able to produce as many goods and services. As a result, the output of goods and services in the economy, GDP, will be lower. This also has an impact on government taxation and spending and will negatively affect their finances.