In a recession, real GDP falls and:
A)unemployment may rise or fall
B)unemployment falls
C)unemployment rises
D)unemployment is unaffected

Question

Quizplus · Accepted Answer

During a recession, businesses often experience decreased demand, leading to fewer sales and profits. This can lead to cost-cutting measures such as layoffs, resulting in an increase in unemployment. Therefore, the correct choice is C as unemployment usually rises during a recession.

In a Recession, Real GDP Falls And