GK
BUSINESS MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Both unemployment and production increase.
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Total supply exceeds demand.
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Total demand exceeds supply.
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The economic growth rate increases rapidly.
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Detailed explanation-1: -Decreased production and increased unemployment occur during recessions.
Detailed explanation-2: -A recession can be defined as a sustained period of weak or negative growth in real GDP (output) that is accompanied by a significant rise in the unemployment rate. Many other indicators of economic activity are also weak during a recession.
Detailed explanation-3: -Demand-pull inflation is when growing demand for goods or services meets insufficient supply, which drives prices higher.
Detailed explanation-4: -Potential output is the maximum amount of goods and services an economy can turn out when it is most efficient-that is, at full capacity. Often, potential output is referred to as the production capacity of the economy.
Detailed explanation-5: -Defining a Recession Many economists define a recession as a period of time where the real GDP (Gross Domestic Product) goes down for at least two consecutive quarters-or 6 months.