Multiple Choice
The opportunity cost of going to a baseball game is
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1. Introduction to Macroeconomics
Introduction to Economics
Multiple Choice
Which of the following typically occurs during a recession?
A
Inflation rates accelerate rapidly
B
Consumer spending rises significantly
C
Gross Domestic Product (GDP) grows faster than usual
D
Unemployment rates increase
Verified step by step guidance1
Step 1: Understand what a recession is — it is a period of economic decline typically characterized by a decrease in GDP for two consecutive quarters.
Step 2: Recall the typical economic indicators during a recession: GDP growth slows down or becomes negative, consumer spending usually decreases, and unemployment rates tend to rise.
Step 3: Analyze each option: Inflation rates accelerating rapidly is uncommon during recessions because demand usually falls; consumer spending rising significantly contradicts the typical drop in demand; GDP growing faster than usual is the opposite of what happens in a recession.
Step 4: Recognize that unemployment rates increase during recessions because businesses reduce production and lay off workers due to lower demand.
Step 5: Conclude that the correct characteristic of a recession from the given options is the increase in unemployment rates.
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