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When the business cycle slows and causes an increase in unemployment for a short period of time the economy is experiencing a?
Wiki User
∙ 13y ago
Bust or depression.
Wiki User
∙ 13y ago
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What are the automatic stabilizers in the economy?
Unemployment benefits and taxation. These are 'automatic stabilizers', because they vary with the business cycle. In a boom period, taxes will increase, and unemployment benefits will fall; whereas during a downswing/ recession, taxes will fall and unemployment benefits will increase.
Environmental-protection laws can be bad for the economy because they may do what?
Environmental-protection laws can be bad for the economy because they may increase unemployment.
What is the nature of Nigerias economy?
The nature of the economy in Nigeria is mixed and also defined as an emerging market. Nigeria's economy is experiencing increasing growth with a 7 percent increase in 2013.
If a some level of GDP the economy is experiencing an unintended decrease in inventories?
domestic output will increase
What is a cyclical unemployment?
Cyclical Unemployment results from business recessions that occur when aggregate (total) demand is insufficient to create full employment.Cyclical Unemployment is due to contractions in the economy
What happened to economy during stagflation?
Higher rates of inflation, decrease in business productivity, high unemployment
Real GDP is not changing at all, unemployment is about 8%, and inflation is steady. Where in the business cycle is the economy?
trough
What issues was Franklin D. Roosevelt concerned about the most?
overproduction, business failures, unemployment relief
The absence of cyclical unemployment is evidence that?
the economy is operating at full employment. Cyclical unemployment refers to the fluctuations in unemployment that are caused by economic downturns or recessions. When there is no cyclical unemployment, it suggests that the economy is in a state of stable growth and there are enough job opportunities available for those seeking employment.
How did the panic of 1837 affect the economy?
the panic of 1837 affected the nations economy by entering an economic depression where the business and unemployment fell to a very low level.
What happened to the economy during stagflation?
Higher rates of inflation, decrease in business productivity, high unemployment
What is the relationship between inflation unemployment and Real GDP?
The relationship between unemployment and GDP is called Okun's law. It is the association of a higher national economic output with the decrease in national unemployment. This is because in order to increase the economic output of a country, people will need to go back to work, thus lowering unemployment. Empirical studies on the relationship between GDP and unemployment show that for every percentage point fall in the unemployment rate there is an increase in GDP by 2.5 percent. Experts believe that the reason for this large coefficient is because the unemployment rate does not count discourages workers who obtain a job before they are counted in the unemployment numbers. Another reason is when economic output increases firms typically don't hire new workers but have their current workers work for longer hours. Also some industries have increasing returns to scale where increasing the labor force has a multiplicative effect on their output.
