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1) Which of the following is most commonly used to monitor short-run changes in economic activity? the inflation rate
1) Which of the following is most commonly used to monitor short-run changes in economic activity?
the inflation rate.
value of the U.S. dollar in the foreign exchange market.
interest rates.
real GDP.
2) Which of the following is correct?
Group of answer choices
When real GDP falls, the rate of unemployment rises.
Recessions come at irregular intervals and are easy to predict.
Short run fluctuations in economic activity happen only in developing countries.
During economic contractions most firms experience rising profits.
Expert Solution
Answer:
1. The answer is option e- real GDP
Real GDP is most commonly used to monitor short-run changes in economic activity
2.
when real GDP falls then unemployment increases is correct
As GDP falls below ptential level of GDP that means AD is less or SRAS is less or shifts the right. Both will lead to less consumption and investment which will increase unemployment.
When real GDP is less, AD is less, so less consumption of goods and services, price level decrease , producers will reduces production due to low prices and profits, production will be decreased by employing less and reduction in existing levels
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