Comparing the unemployment rate and the business cycle we see that
A) the unemployment rate generally increases during expansions and generally decreases during recessions.
B) there is virtually no relationship between the business cycle and the unemployment rate.
C) the unemployment rate eventually falls during expansions and rises during recessions.
D) higher unemployment rates are the cause of most business cycles.

Question

Quizplus · Accepted Answer

During economic expansions, businesses grow and hire more workers, leading to a decrease in the unemployment rate. Conversely, during recessions, economic activity slows down, leading to layoffs and an increase in the unemployment rate.

Comparing the Unemployment Rate and the Business Cycle We See