What would be expected to happen to each of the following variables during a recession? Unemployment would be expected to ▼ increase stay the same decrease. Durable goods production, such as automobiles, would be expected to ▼ increase stay the same decrease. The inflation rate would be expected to ▼ increase stay the same decrease.

Question

Frances Delgado

Social Studies

4 March, 01:22

What would be expected to happen to each of the following variables during a recession? Unemployment would be expected to ▼ increase stay the same decrease. Durable goods production, such as automobiles, would be expected to ▼ increase stay the same decrease. The inflation rate would be expected to ▼ increase stay the same decrease.

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Cullen Clay · Answer 1

Unemployment would be expected to: Increase.

Durable goods production, such as automobiles, would be expected to: Decrease.

The inflation rate would be expected to: Decrease.

Explanation:

A recession is a contraction of the economy and generally, a country is considered to be in recession when there is a negative growth during two quarters. During a recession, and as a consequence of the negative growth, companies have less earnings and they tend to fire workers which increases the unemployment. Also, people tend to buy less durable goods which causes that the production of these decreases and inflation tends to decrease because when the demand for products falls and the unemployment increases, this tends to put pressure on the prices to go down which results on a lower inflation.