This graph shows changes in GDP and the unemployment rate in the United States in recent years. Which statement most accurately describes the trends shown on this graph? A) When GDP falls, unemployment rises. B) GDP and unemployment have little to do with each other. C) When GDP rises, unemployment rises as well. D) GDP and unemployment rise at times of world crises.
History · High School · Tue Nov 03 2020
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A) When GDP falls, unemployment rises.
there is an inverse relationship between GDP and unemployment rate. When an economy is expanding and experiencing growth in GDP, businesses demand more labor to produce goods and services, which usually results in lower unemployment rates. Conversely, when GDP is falling, indicating a contraction in the economy, businesses demand less labor due to decreased production needs, which can lead to higher unemployment rates.