During a recession:
A) unemployment and the growth rate of real GDP both decrease.
B) unemployment decreases and the growth rate of real GDP increases.
C) unemployment increases and the growth rate of real GDP decreases.
D) there is no relation between unemployment and the growth rate of real GDP.

Question

Quizplus · Accepted Answer

During a recession, unemployment tends to increase as businesses lay off workers and the demand for goods and services decreases. This results in a decrease in the growth rate of real GDP since there is less economic activity overall. Therefore, choice C is the best option.

During a Recession