The impact of recession on real GDP and unemployment .

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 20, Problem 1CQQ

To determine

The impact of recession on real GDP and unemployment.

Expert Solution & Answer

Answer to Problem 1CQQ

Option 'c' is correct.

Explanation of Solution

The recession is an important part of the business cycle in the economy. It is the movement of the economy from the highest peak point of economic boom towards the lowest point of economic depression. The economy produces various types of final goods and services in a financial year and the sum value of all the final goods and services produced within the political boundary in a financial year is known as the Gross Domestic Product (GDP) of an economy.

Option (c):

The recession is a movement of economy from economic boom towards the economic depression. When the economic recession takes place, the firms would reduce their output due to the lower aggregate demand in the economy. As a result of this, the firms would lay off their excess workers and the unemployment in the economy would rise substantially. Thus the reduction in the total final product of the economy leads to the reduction in the real GDP of the economy. Thus, option 'c' is correct.

Option (a):

The recession will face a period where the households will reduce their consumption and the firms face lower demands in the economy. This leads to the reduction in the output of the economy and simultaneously reduces the GDP of the economy because the GDP is the sum value of all the final goods and services produced in the economy. So, the firms will lay off workers which rises the unemployment rate in the economy. Since the option explains that the real GDP would rise in the economy, option 'a' is incorrect.

Option (b):

The recession will face a period where the households will reduce their consumption and the firms face lower demands in the economy. This leads to the reduction in the output of the economy and simultaneously reduces the GDP of the economy because the GDP is the sum value of all the final goods and services produced in the economy. So, the firms will lay off workers which rises the unemployment rate in the economy. Since the option explains that the unemployment would fall in the economy, option 'b' is incorrect.

Option (d):

The reduction in the output of the firms due to lower aggregate demand leads to the fall in the real GDP during the period of recession. But the reduction in output leads to the layoff of the workers in the firms due to lower production which increases unemployment in the economy. Thus, option 'd' is incorrect.

Economics Concept Introduction

Concept introduction:

Recession: It is the movement of the economy from its highest peak point of growth towards the lowest point of depression in the business cycle. Thus, it is a downward movement of economy from peak to depression.

GDP: It is the money value of all the final goods and services produced within the political boundary of an economy in a financial year.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Thanks in advance!

I need help figuring this out. I'm pretty sure this is correct?If Zambia is open to international trade in oranges without any restrictions, it will import 180 tons of oranges.I can't figure these two out: 1) Suppose the Zambian government wants to reduce imports to exactly 60 tons of oranges to help domestic producers. A tariff of ???? per ton will achieve this. 2) A tariff set at this level would raise ????in revenue for the Zambian government.

16:10 ← BEC 3701 - Assignments-... KWAME NKRUMAH UNIVERSITY TEACHING FOR EXCELLENCE SCHOOL OF BUSINESS STUDIES DEPARTMENT OF ECONOMICS AND FINANCE ADVANCED MICRO-ECONOMICS (BEC 3701) Assignments INSTRUCTIONS: Check instructions below: LTE 1) Let u(q1,q2) = ln q₁ + q2 be the (direct) utility function, where q₁ and q2the two goods. Denote P₁ and P2 as the prices of those two goods and let M be per period money income. Derive each of the following: a) the ordinary or Marshallian demand functions q₁ = d₂ (P₁, P₂, M) for i = 1,2 [3 Marks] b) the compensated or Hicksian demand functions q₁ = h₂ (P₁, P2, M) for i = 1,2 [3 Marks] c) the Indirect Utility Function uº = v(P₁, P2, M) [3 Marks] d) the Expenditure Function E(P1, P2, U°) [3 Marks] e) Draw a diagram of the solution. There should be two graphs, one above the other; the first containing the indifference curves and budget constraint that characterize the solution to the consumer's choice problem; the second characterizing the demand…

Answer 2

Question

Chapter 20, Problem 1CQQ

To determine

The impact of recession on real GDP and unemployment.

Expert Solution & Answer

Answer to Problem 1CQQ

Option 'c' is correct.

Explanation of Solution

The recession is an important part of the business cycle in the economy. It is the movement of the economy from the highest peak point of economic boom towards the lowest point of economic depression. The economy produces various types of final goods and services in a financial year and the sum value of all the final goods and services produced within the political boundary in a financial year is known as the Gross Domestic Product (GDP) of an economy.

Option (c):

The recession is a movement of economy from economic boom towards the economic depression. When the economic recession takes place, the firms would reduce their output due to the lower aggregate demand in the economy. As a result of this, the firms would lay off their excess workers and the unemployment in the economy would rise substantially. Thus the reduction in the total final product of the economy leads to the reduction in the real GDP of the economy. Thus, option 'c' is correct.

Option (a):

The recession will face a period where the households will reduce their consumption and the firms face lower demands in the economy. This leads to the reduction in the output of the economy and simultaneously reduces the GDP of the economy because the GDP is the sum value of all the final goods and services produced in the economy. So, the firms will lay off workers which rises the unemployment rate in the economy. Since the option explains that the real GDP would rise in the economy, option 'a' is incorrect.

Option (b):

The recession will face a period where the households will reduce their consumption and the firms face lower demands in the economy. This leads to the reduction in the output of the economy and simultaneously reduces the GDP of the economy because the GDP is the sum value of all the final goods and services produced in the economy. So, the firms will lay off workers which rises the unemployment rate in the economy. Since the option explains that the unemployment would fall in the economy, option 'b' is incorrect.

Option (d):

The reduction in the output of the firms due to lower aggregate demand leads to the fall in the real GDP during the period of recession. But the reduction in output leads to the layoff of the workers in the firms due to lower production which increases unemployment in the economy. Thus, option 'd' is incorrect.

Economics Concept Introduction

Concept introduction:

Recession: It is the movement of the economy from its highest peak point of growth towards the lowest point of depression in the business cycle. Thus, it is a downward movement of economy from peak to depression.

GDP: It is the money value of all the final goods and services produced within the political boundary of an economy in a financial year.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 20, Problem 1CQQ

To determine

The impact of recession on real GDP and unemployment.

Expert Solution & Answer

Answer to Problem 1CQQ

Option 'c' is correct.

Explanation of Solution

The recession is an important part of the business cycle in the economy. It is the movement of the economy from the highest peak point of economic boom towards the lowest point of economic depression. The economy produces various types of final goods and services in a financial year and the sum value of all the final goods and services produced within the political boundary in a financial year is known as the Gross Domestic Product (GDP) of an economy.

Option (c):

The recession is a movement of economy from economic boom towards the economic depression. When the economic recession takes place, the firms would reduce their output due to the lower aggregate demand in the economy. As a result of this, the firms would lay off their excess workers and the unemployment in the economy would rise substantially. Thus the reduction in the total final product of the economy leads to the reduction in the real GDP of the economy. Thus, option 'c' is correct.

Option (a):

The recession will face a period where the households will reduce their consumption and the firms face lower demands in the economy. This leads to the reduction in the output of the economy and simultaneously reduces the GDP of the economy because the GDP is the sum value of all the final goods and services produced in the economy. So, the firms will lay off workers which rises the unemployment rate in the economy. Since the option explains that the real GDP would rise in the economy, option 'a' is incorrect.

Option (b):

The recession will face a period where the households will reduce their consumption and the firms face lower demands in the economy. This leads to the reduction in the output of the economy and simultaneously reduces the GDP of the economy because the GDP is the sum value of all the final goods and services produced in the economy. So, the firms will lay off workers which rises the unemployment rate in the economy. Since the option explains that the unemployment would fall in the economy, option 'b' is incorrect.

Option (d):

The reduction in the output of the firms due to lower aggregate demand leads to the fall in the real GDP during the period of recession. But the reduction in output leads to the layoff of the workers in the firms due to lower production which increases unemployment in the economy. Thus, option 'd' is incorrect.

Economics Concept Introduction

Concept introduction:

Recession: It is the movement of the economy from its highest peak point of growth towards the lowest point of depression in the business cycle. Thus, it is a downward movement of economy from peak to depression.

GDP: It is the money value of all the final goods and services produced within the political boundary of an economy in a financial year.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 20, Problem 1CQQ

To determine

The impact of recession on real GDP and unemployment.

Expert Solution & Answer

Answer to Problem 1CQQ

Option 'c' is correct.

Explanation of Solution

The recession is an important part of the business cycle in the economy. It is the movement of the economy from the highest peak point of economic boom towards the lowest point of economic depression. The economy produces various types of final goods and services in a financial year and the sum value of all the final goods and services produced within the political boundary in a financial year is known as the Gross Domestic Product (GDP) of an economy.

Option (c):

The recession is a movement of economy from economic boom towards the economic depression. When the economic recession takes place, the firms would reduce their output due to the lower aggregate demand in the economy. As a result of this, the firms would lay off their excess workers and the unemployment in the economy would rise substantially. Thus the reduction in the total final product of the economy leads to the reduction in the real GDP of the economy. Thus, option 'c' is correct.

Option (a):

The recession will face a period where the households will reduce their consumption and the firms face lower demands in the economy. This leads to the reduction in the output of the economy and simultaneously reduces the GDP of the economy because the GDP is the sum value of all the final goods and services produced in the economy. So, the firms will lay off workers which rises the unemployment rate in the economy. Since the option explains that the real GDP would rise in the economy, option 'a' is incorrect.

Option (b):

The recession will face a period where the households will reduce their consumption and the firms face lower demands in the economy. This leads to the reduction in the output of the economy and simultaneously reduces the GDP of the economy because the GDP is the sum value of all the final goods and services produced in the economy. So, the firms will lay off workers which rises the unemployment rate in the economy. Since the option explains that the unemployment would fall in the economy, option 'b' is incorrect.

Option (d):

The reduction in the output of the firms due to lower aggregate demand leads to the fall in the real GDP during the period of recession. But the reduction in output leads to the layoff of the workers in the firms due to lower production which increases unemployment in the economy. Thus, option 'd' is incorrect.

Economics Concept Introduction

Concept introduction:

Recession: It is the movement of the economy from its highest peak point of growth towards the lowest point of depression in the business cycle. Thus, it is a downward movement of economy from peak to depression.

GDP: It is the money value of all the final goods and services produced within the political boundary of an economy in a financial year.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 20, Problem 1CQQ

To determine

The impact of recession on real GDP and unemployment.

Expert Solution & Answer

Answer to Problem 1CQQ

Option 'c' is correct.

Explanation of Solution

The recession is an important part of the business cycle in the economy. It is the movement of the economy from the highest peak point of economic boom towards the lowest point of economic depression. The economy produces various types of final goods and services in a financial year and the sum value of all the final goods and services produced within the political boundary in a financial year is known as the Gross Domestic Product (GDP) of an economy.

Option (c):

The recession is a movement of economy from economic boom towards the economic depression. When the economic recession takes place, the firms would reduce their output due to the lower aggregate demand in the economy. As a result of this, the firms would lay off their excess workers and the unemployment in the economy would rise substantially. Thus the reduction in the total final product of the economy leads to the reduction in the real GDP of the economy. Thus, option 'c' is correct.

Option (a):

The recession will face a period where the households will reduce their consumption and the firms face lower demands in the economy. This leads to the reduction in the output of the economy and simultaneously reduces the GDP of the economy because the GDP is the sum value of all the final goods and services produced in the economy. So, the firms will lay off workers which rises the unemployment rate in the economy. Since the option explains that the real GDP would rise in the economy, option 'a' is incorrect.

Option (b):

The recession will face a period where the households will reduce their consumption and the firms face lower demands in the economy. This leads to the reduction in the output of the economy and simultaneously reduces the GDP of the economy because the GDP is the sum value of all the final goods and services produced in the economy. So, the firms will lay off workers which rises the unemployment rate in the economy. Since the option explains that the unemployment would fall in the economy, option 'b' is incorrect.

Option (d):

The reduction in the output of the firms due to lower aggregate demand leads to the fall in the real GDP during the period of recession. But the reduction in output leads to the layoff of the workers in the firms due to lower production which increases unemployment in the economy. Thus, option 'd' is incorrect.

Economics Concept Introduction

Concept introduction:

Recession: It is the movement of the economy from its highest peak point of growth towards the lowest point of depression in the business cycle. Thus, it is a downward movement of economy from peak to depression.

GDP: It is the money value of all the final goods and services produced within the political boundary of an economy in a financial year.

Answer 6

Chapter 20, Problem 1CQQ

To determine

The impact of recession on real GDP and unemployment.

Expert Solution & Answer

Answer to Problem 1CQQ

Option 'c' is correct.

Explanation of Solution

The recession is an important part of the business cycle in the economy. It is the movement of the economy from the highest peak point of economic boom towards the lowest point of economic depression. The economy produces various types of final goods and services in a financial year and the sum value of all the final goods and services produced within the political boundary in a financial year is known as the Gross Domestic Product (GDP) of an economy.

Option (c):

The recession is a movement of economy from economic boom towards the economic depression. When the economic recession takes place, the firms would reduce their output due to the lower aggregate demand in the economy. As a result of this, the firms would lay off their excess workers and the unemployment in the economy would rise substantially. Thus the reduction in the total final product of the economy leads to the reduction in the real GDP of the economy. Thus, option 'c' is correct.

Option (a):

The recession will face a period where the households will reduce their consumption and the firms face lower demands in the economy. This leads to the reduction in the output of the economy and simultaneously reduces the GDP of the economy because the GDP is the sum value of all the final goods and services produced in the economy. So, the firms will lay off workers which rises the unemployment rate in the economy. Since the option explains that the real GDP would rise in the economy, option 'a' is incorrect.

Option (b):

The recession will face a period where the households will reduce their consumption and the firms face lower demands in the economy. This leads to the reduction in the output of the economy and simultaneously reduces the GDP of the economy because the GDP is the sum value of all the final goods and services produced in the economy. So, the firms will lay off workers which rises the unemployment rate in the economy. Since the option explains that the unemployment would fall in the economy, option 'b' is incorrect.

Option (d):

The reduction in the output of the firms due to lower aggregate demand leads to the fall in the real GDP during the period of recession. But the reduction in output leads to the layoff of the workers in the firms due to lower production which increases unemployment in the economy. Thus, option 'd' is incorrect.

Economics Concept Introduction

Concept introduction:

Recession: It is the movement of the economy from its highest peak point of growth towards the lowest point of depression in the business cycle. Thus, it is a downward movement of economy from peak to depression.

GDP: It is the money value of all the final goods and services produced within the political boundary of an economy in a financial year.

Answer 7

Chapter 20, Problem 1CQQ

To determine

The impact of recession on real GDP and unemployment.

Answer 8

Expert Solution & Answer

Answer to Problem 1CQQ

Option 'c' is correct.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

The recession is an important part of the business cycle in the economy. It is the movement of the economy from the highest peak point of economic boom towards the lowest point of economic depression. The economy produces various types of final goods and services in a financial year and the sum value of all the final goods and services produced within the political boundary in a financial year is known as the Gross Domestic Product (GDP) of an economy.

Option (c):

The recession is a movement of economy from economic boom towards the economic depression. When the economic recession takes place, the firms would reduce their output due to the lower aggregate demand in the economy. As a result of this, the firms would lay off their excess workers and the unemployment in the economy would rise substantially. Thus the reduction in the total final product of the economy leads to the reduction in the real GDP of the economy. Thus, option 'c' is correct.

Option (a):

The recession will face a period where the households will reduce their consumption and the firms face lower demands in the economy. This leads to the reduction in the output of the economy and simultaneously reduces the GDP of the economy because the GDP is the sum value of all the final goods and services produced in the economy. So, the firms will lay off workers which rises the unemployment rate in the economy. Since the option explains that the real GDP would rise in the economy, option 'a' is incorrect.

Option (b):

The recession will face a period where the households will reduce their consumption and the firms face lower demands in the economy. This leads to the reduction in the output of the economy and simultaneously reduces the GDP of the economy because the GDP is the sum value of all the final goods and services produced in the economy. So, the firms will lay off workers which rises the unemployment rate in the economy. Since the option explains that the unemployment would fall in the economy, option 'b' is incorrect.

Option (d):

The reduction in the output of the firms due to lower aggregate demand leads to the fall in the real GDP during the period of recession. But the reduction in output leads to the layoff of the workers in the firms due to lower production which increases unemployment in the economy. Thus, option 'd' is incorrect.

Answer 12

Economics Concept Introduction

Concept introduction:

Recession: It is the movement of the economy from its highest peak point of growth towards the lowest point of depression in the business cycle. Thus, it is a downward movement of economy from peak to depression.

GDP: It is the money value of all the final goods and services produced within the political boundary of an economy in a financial year.

Answer 13

Ch. 20.1 - Prob. 1QQ Ch. 20.2 - Prob. 2QQ Ch. 20.3 - Prob. 3QQ Ch. 20.4 - Prob. 4QQ Ch. 20.5 - Prob. 5QQ Ch. 20 - Prob. 1CQQ Ch. 20 - Prob. 2CQQ Ch. 20 - Prob. 3CQQ Ch. 20 - Prob. 4CQQ Ch. 20 - Prob. 5CQQ

The impact of recession on real GDP and unemployment .

The impact of recession on real GDP and unemployment.

Answer to Problem 1CQQ

Explanation of Solution

Want to see more full solutions like this?

Chapter 20 Solutions