Question

Which of the following is correct? a. Short run fluctuations in economic activity happen only in developing countries. b. During economic contractions most firms experience rising profits. c. Recessions come at irregular intervals and are easy to predict. d. When real GDP falls, the rate of unemployment generally rises.

Answer 1

Answer:

The answer to this question is D When real GDP falls, the rate of unemployment generally rises.

Explanation:

Gross domestic product (GDP) is the total value of everything produced in a country, whether by its citizen or foreigners.

Real GDP is a measurement of economic output that accounts for the effects of inflation or deflation.  It provides a more realistic assessment of growth.  

Therefore when real GDP falls, the rate of unemployment  rises and this brings inflation