Part 1 Suppose that the natural rate of unemployment during

(Part 1) Suppose that the natural rate of unemployment during the Great Depression and the Great Recession was 5%.

1. During the worst part of the Great Depression, cyclical unemployment was equal to _____%

A. 26

B. 21

C. 10

D. 5

2. During the worst part of the Great Recession, cyclical unemployment was equal to _____ %

A. 26

B. 21

C. 10

D. 5

(Part 2) Another indication of how severe the Great Depression was compared to the Great Recession is the number of years it took until the economy returned to prerecession GDP. It took ______  more years for the economy to recover from the Great Depression compared to the Great Recession.

A. 2

B. 3

C. 7

D. 10

Solution

Suppose that the natural rate of unemployment during the Great Depression and the Great Recession was 5%.

1. During the worst part of the Great Depression, cyclical unemployment was equal to _____%

A. 26

2. During the worst part of the Great Recession, cyclical unemployment was equal to _____ %

C. 10

(Part 2) Another indication of how severe the Great Depression was compared to the Great Recession is the number of years it took until the economy returned to prerecession GDP. It took ______  more years for the economy to recover from the Great Depression compared to the Great Recession.

D. 10