Chapter 14, Problem 2P

To determine

Why we could see an increase in the official unemployment rate after several quarters of a strong expansion.

Concept Introduction:

Gross Domestic Product: It refers to gross money value or gross market value of all the finished goods and the services produced by the normal resident and non-resident people of the country that is within the borders of the country in an accounting period.

Economic Recession: This period is the early stage of depression. In this period, the economy is in the declining stage where slowdown is seen in the stock market, household goods market. Moreover, there is an increase in the unemployment rate.

Unemployment Rate: Unemployment rate refers to the measure of total unemployed population, voluntarily or involuntarily, within the given area out of the total existing population.