Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 33 - Part XII - Aggregate Demand and Aggregate Supply - Questions for Review: 1

Answer

Macroeconomic variables that fall when the economy is in a recession include real GDP and investments by corporations. Macroeconomic variable that will rise during recession is unemployment rate.

Work Step by Step

This question is simplistic. The occurrence of recession causes overall production to be lowered so real GDP falls and with recession investment spending will also fall because such ventures will incur more risk. Always during a recession people lose jobs so unemployment must rise.
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