ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -3. The trough is the bottom of the recession period, unemployment is at its highest, inflation is low. 4. expansion (recovery) is when output is increasing, unemployment begins to fall and later inflation begins to rise.

Detailed explanation-2: -Cyclical unemployment is the component of overall unemployment that results directly from cycles of economic upturn and downturn. Unemployment typically rises during recessions and declines during economic expansions.

Detailed explanation-3: -Cyclical Unemployment During an economic downturn, a shortfall of demand for goods and services results in a lack of jobs being available for those who want to work. Businesses experiencing weaker demand might reduce the amount of people they employ by laying off existing workers, or hiring fewer new workers.

Detailed explanation-4: -A contraction generally occurs after the business cycle peaks, but before it becomes a trough. According to most economists, when a country’s real gross domestic product (GDP)-the most-watched indicator of economic activity-has declined for two or more consecutive quarters, then a recession has occurred.