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26 May, 11:06

What happens to unemployment, during prosperous times

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  1. 26 May, 11:26
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    Unemployment is expected to decrease during prosperous times.

    Explanation:

    When economic activity is increasing ("prosperous times"), firms are suppose to sell more goods and services, and because of this, they produce more goods and services. To produce more goods and services, firms employ more workers (they hire more people) and use more capital (they demand more credits, for example, to buy new machines, or to improve technology). Then, because employment is suppose to increase under this circumstances, unemeployment decreases.
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