### Economic Indicators During a Recession**Question:**Which of the following will probably rise when the economy is in a recession?**Options:**- Real GDP growth- Initial unemployment claims- Real retail sales- Employment### ExplanationThis question aims to test your understanding of economic indicators and their behavior during a recession. Let's break down each option:1. **Real GDP Growth:** - **Definition:** The real Gross Domestic Product (GDP) represents the total value of all goods and services produced over a specific time period, adjusted for inflation. - **Recession Effect:** During a recession, the economy contracts, which means real GDP growth would typically decline, not rise.2. **Initial Unemployment Claims:** - **Definition:** This metric records the number of people filing for unemployment benefits for the first time. - **Recession Effect:** In a recession, businesses often cut jobs to reduce costs, which leads to an increase in initial unemployment claims.3. **Real Retail Sales:** - **Definition:** This measure tracks the total receipts of retail stores, adjusted for inflation. - **Recession Effect:** Consumers tend to cut back on spending during economic downturns, which usually results in a drop in real retail sales.4. **Employment:** - **Definition:** This refers to the number of people currently employed within the economy. - **Recession Effect:** During a recession, employment levels generally fall as businesses lay off workers and hiring slows down.Based on these explanations, the correct answer is:**Initial unemployment claims**This option is most likely to rise during a recession due to increased layoffs and economic uncertainty. Understanding these economic indicators can help you better predict and respond to economic shifts. Certainly! Below is the transcription of the image, adapted for an educational website:---### Understanding the GDP Deflator and Its Economic ImplicationsThe GDP deflator is an important economic indicator that reflects the level of prices of all domestically produced goods and services in an economy. Understanding the effects of a higher GDP deflator is crucial for comprehending the overall economic health and the purchasing power of a country. **When the GDP deflator is higher in an economy, the following effects can be observed:**1. **Higher purchasing power of the currency.**2. **Lower real wealth in the economy.**3. **Higher real wealth in an economy.**4. **More expensive the country's exports.**To solidify your understanding, consider the multiple-choice question below:**Question:**Which of the following options correctly describes the effects of a higher GDP deflator?- (i), (iii), and (iv)- (ii) and (iv)- (i), (ii), (iii), and (iv)- (i) onlyChoose the correct answer from the options provided to test your understanding of the concept.---*[Note to educators: This question can be discussed in the classroom or used for individual assessment to ensure students understand the theoretical and practical implications of changes in the GDP deflator.]*

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Answered: Which of the following will probably…

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Economics

Which of the following will probably rise when the economy is in a recession?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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