Question

The impact of the national debt on the​ economy's unemployment is an example of A. behavioral economics. B. macroeconomics analysis. C. irrational economics. D. microeconomic analysis.

Answer 1

Answer: B. macroeconomics analysis

Explanation: Macroeconomics analysis is the branch of economics that studies the economy as a whole and it focuses majorly on three areas viz national output, inflation and unemployment.

Macroeconomics analysis of unemployment tells how many people from the labor force are unable to find work despite being able and willing to work. Whenever the economy shows growth, indicated in the GDP growth rate, the rate of unemployment tends to be low. The reason behind this is that output becomes higher with rising real GDP levels, hence, more laborers/workers/employees are needed to keep up with the increased levels of production. Also, interest payment by a government on excessive debt tend to harm the economy and may lead to harsh economic policies, which can increase unemployment through layoffs, downsizing etc.