The macroeconomic variables that would decline during recession and one variable that would rise during recession.
Explanation of Solution
During the period of a recession, the economy will face the leftward shift in the Aggregate Demand and
Thus, the real GDP of the economy, the consumption spending and the investment spending would decline during the period of recession in the economy. The macroeconomic variable that increases during the period of recession is the unemployment rate.
Concept introduction:
Economic fluctuations: They are the fluctuations in the level of
Recession: It is one important phase in the business cycle. This phase is the movement of the economy from the peak point of prosperity towards the depression which is the lower point of the economic business cycle.
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Chapter 33 Solutions
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