Real Growth in Unemployment Inflation r GDP Real GDP Rate Rate s0 5,839 -.2 7.1 13.5

ENGR.ECONOMIC ANALYSIS
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Author:NEWNAN
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Chapter1: Making Economics Decisions
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%
Real
Growth in Unemployment Inflation
Year GDP Real GDP Rate
Rate
1980 5,839 -.2
7.1
13.5
1981 5,987 2.5
7.6
10.3
1982 5,870 -2.0
9.7
6.2
Which of the following terms accurately describe ALL
of the years on the chart above?
Stagflation
O Full Employment
Expansion
Recession
Transcribed Image Text:% Real Growth in Unemployment Inflation Year GDP Real GDP Rate Rate 1980 5,839 -.2 7.1 13.5 1981 5,987 2.5 7.6 10.3 1982 5,870 -2.0 9.7 6.2 Which of the following terms accurately describe ALL of the years on the chart above? Stagflation O Full Employment Expansion Recession
Expert Solution
Step 1

Inflation and unemployment are the trade-offs that would result in a rise in inflation with a fall in unemployment. The Philips curve would result in the trade-off between inflation and unemployment.

The economy having an increase in output is the expansion, and a fall in output is called the recession. The economy would have a rise in output and price in expansion and vice versa in recession.

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