(a) What do you understand by the terms recession, trough, and recovery? How does the change in the unemployment rate relate to business cycle? (b) What is the difference between real GDP and nominal GDP? Discuss factors that affect the income level of a country.

(a) What do you understand by the terms recession, trough, and recovery? How does the change in the unemployment rate relate to business cycle? (b) What is the difference between real GDP and nominal GDP? Discuss factors that affect the income level of a country.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter21: Unemployment

Section: Chapter Questions

Problem 30CTQ: Using the definition of the unemployment rate, is an increase in the unemployment rate necessarily a...

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QUESTION 3

(a) What do you understand by the terms recession, trough, and recovery? How does the change in the unemployment rate relate to business cycle?

(b) What is the difference between real GDP and nominal GDP? Discuss factors that affect the income level of a country.

Definition Definition State in which an individual is without work, despite actively seeking employment opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed. Unemployment is one of the key indicators of the conditions prevailing in an economy. It is therefore considered a barometer that points out the condition of an economy.

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Step 1: Explain Business Cycle:

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Step 2: a) Explain Recession, Trough, Recovery

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Step 3: Unemployment Rate and Business Cycle:

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Step 4: b) Explain Real GDP and Nominal GDP:

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