Below are pairs of GDP growth rates and unemployment rates.Economists would be shocked to see most of these pairs.Which pair of GDP growth rates and unemployment rates is most realistic?
A) -3 percent,2 percent
B) -1 percent,20 percent
C) 1 percent,7 percent
D) 6 percent,0 percent

Question

Quizplus · Accepted Answer

A GDP growth rate of 1 percent and an unemployment rate of 7 percent are both within realistic ranges for most economies. A negative GDP growth rate paired with a low unemployment rate (option A) is uncommon because a shrinking economy usually leads to job losses. The pairing of a negative GDP growth rate with a high unemployment rate (option B) is also uncommon but could occur during severe economic crises. A high GDP growth rate paired with a 0 percent unemployment rate (option D) is almost impossible because there are always some degree of frictional unemployment, and a rapidly expanding economy could cause inflation, leading to higher interest rates and reduced investment.

Below Are Pairs of GDP Growth Rates and Unemployment Rates