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11 December, 10:56

How does the unemployment rate relate to economic growth

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  1. 11 December, 11:10
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    If there is a high unemployment rate then the economic growth is low and when there is a low unemployment rate then the economic growth is high.

    But sometimes that is not the case, if there is negative economic growth also known as recession, then there is a rise in unemployment because of these following situations:

    - Less demand for goods, so the firm will produce less products thus needing low number of workers.

    - The company is bankrupt.

    - Firms are hesitant to hire workers because of the uncertainty and negative economic growth.
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