QUESTION 13 During the recession phase of the business cycle

QUESTION 13 During the recession phase of the business cycle, which of the following conditions would expect to observe? Real GDP is increasing, incomes are rising, and unemployment is falling. Real GDP is increasing, incomes are rising, and unemployment is increasing. Real GDP is falling, incomes are in decline, and unemployment is falling. Real GDP is falling, incomes are in decline, and unemployment is rising. QUESTION 14 Please examine the table below illustrating some population characteristics for the hvpothetical nation of Ecolan Which of the following choices below best illustrates the unemployment rate in Ecoland?

Solution

13.

D

14.

C.28.6%

Unemployment rate = unemployed /(unemployed + employed) = 200/(200+500) = 28.6%

15.

C.16.7%

Unemployment rate = unemployed /(unemployed + employed) = 100/(100+500) = 16.7%

16.

B

It is the difference between the potential GDP and the actual GDP.