Question

Unemployment rises and real gross domestic product (GDP) growth slows during the:

a. expansion phase of a business cycle.
b. recession phase of a business cycle.
c. entire business cycle.
d. reovery phase of a business cycle.
e. short-run phase of a business cycle.

Answer 1

Unemployment and a slowdown in real GDP growth occur during the recession phase of a business cycle, where economic activity decreases significantly for an extended period.

Step-by-step explanation:

Unemployment rises and real gross domestic product (GDP) growth slows during the recession phase of a business cycle. This downturn starts from the peak and continues until it hits the trough, which signifies the end of a recession.

A recession is characterized by a significant decline in economic activity across the economy that lasts for months or even years. Experts define a recession as two consecutive quarters of negative GDP growth. The pattern of U.S. real GDP shows that short-term declines, represented as recessions, regularly interrupt the long-term upward trend.

The 1930s Great Depression and the 2008-2009 Great Recession are notable examples where a severe drop in GDP was observed. It is during these recessionary phases that we witness higher unemployment rates and a slowdown in economic growth, as the economy contracts rather than expands.