A typical trend during a recession is that:
A) the unemployment rate falls.
B) the popularity of the incumbent government rises.
C) incomes fall.
D) the inflation rate rises.

Question

Quizplus · Accepted Answer

During a recession, there is a decrease in economic activity leading to reduced demand for goods and services, resulting in lower production levels and, consequently, lower incomes. Unemployment also tends to increase during a recession, which exacerbates the fall in incomes. The popularity of the incumbent government may be affected by how it handles the recession, but there is no general trend for it to rise. Additionally, the inflation rate typically falls during a recession due to reduced demand and excess supply. Therefore, options A and D are incorrect.

A Typical Trend During a Recession Is That