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Assume the long-run trend of real output in an economy is at an annual growth rate...
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<blockquote data-quote="Brio" data-source="post: 2091966" data-attributes="member: 688215"><p>...of 4%. At the beginning of? A "growth recession" occurs when an economy's output increases, but at a rate slower than long-run output growth. Unemployment will rise even when output is rising because the number of jobs created by the additional output is not sufficient to employ the workers entering the labor force. Unemployment also may increase even when output increases if productivity grows at a faster rate than the demand for goods and services. In that case, the nation's output can be produced with fewer workers, leading to an increase in the unemployment rate. </p><p></p><p> </p><p> A. The unemployment rate will remain at 6% at the end of the year.</p><p> </p><p> B. The unemployment rate will rise above 6% at the end of the year.</p><p> </p><p> C. The unemployment rate will fall below 6% at the end of the year.</p></blockquote><p></p>
[QUOTE="Brio, post: 2091966, member: 688215"] ...of 4%. At the beginning of? A "growth recession" occurs when an economy's output increases, but at a rate slower than long-run output growth. Unemployment will rise even when output is rising because the number of jobs created by the additional output is not sufficient to employ the workers entering the labor force. Unemployment also may increase even when output increases if productivity grows at a faster rate than the demand for goods and services. In that case, the nation's output can be produced with fewer workers, leading to an increase in the unemployment rate. A. The unemployment rate will remain at 6% at the end of the year. B. The unemployment rate will rise above 6% at the end of the year. C. The unemployment rate will fall below 6% at the end of the year. [/QUOTE]
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