When the "real" GDP falls, the rate of unemployment generally
A) increases.
B) decreases.
C) stays constant.
D) equals the natural rate.

Name: When the "real" GDP falls, the rate of unemployment generally A) increases. B) decreases. C) stays constant. D) equals the natural rate.
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Question

Quizplus · Accepted Answer

When the real GDP falls, it typically means that businesses are producing less and therefore need fewer workers. This leads to an increase in unemployment as more people are without jobs.

When the "Real" GDP Falls, the Rate of Unemployment Generally