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Why is real gross domestic product used to determine if the economy is in recession why not use unemployment figures?
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What is an acceptable unemployment rate?
5.4% when the economy is good. 9.5% when the economy is in a recession.
What do economists use to determine if an economy is healthy or if it is in a recession or depression?
GDP
Are wages high or low in a recession?
Not all sectors of the economy or professions are affected negatively by a recession, but times of economic hardship certainly are followed by high unemployment and wide cuts in wages.
What is the Opposite of an economic recession?
Economic recession is when the economy, as a whole, is actually shrinking (GDP shrinks, unemployment rises, as the demand for goods and services is lessened.)The opposite of an economic recession, is economic growth.Economic growth is when the economy is expanding, jobs are being created because of increased demand or stimulated demand.
How do the different types of unemployment affect the economy?
There are 5 different types of unemployment: Frictional, Seasonal, Cyclical, Hardcore (or longterm) and Structural. The only type of unemployment that can be fixed or conrolled is Cyclical unemployment, due to fluctuations or recession in the business cyle. Cyclical unemployment causes employers to cut down workers, due to cost cuttings because there is a recession. Everything else is natural.
How does an unemployment rate help you determine if an economy is strong or weak?
oh my gash
What are 3 economic challenges in America's economy?
1. Debt - 16 Billion Dollars2. Recession - Since 20073. Unemployment - 9%
What does gross domestic product measure?
Is used to determine health or an economy.
What happens to the economy during a recession?
An Economic Recession is a period of economic contraction (The Growth Rate shrinks and becomes stagnant)
Why is Gross Domestic Product?
GDP influences nearly everyone in a economy. For example, when the economy is healthy, you will typically see low unemployment and wage increases as businesses demand labor to meet the growing economy. A significant change in GDP, whether up or down, usually has a significant effect on the Stock Market. It's not hard to understand why: a bad economy usually means lower profits for companies, which in turn means lower stock prices. Investors really worry about negative GDP growth, which is one of the factors economists use to determine whether an economy is in a recession.
Has the economy improved or worsened in countries that have adopted the Euro?
The economy of countries that have adopted the Euro has worsened with double dip recession. High unemployment, increase in public debt, and financial fragility is seen.
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.
