Homework Problems 10 - Roxana Canales Macroeconomics Homework 10 Review Questions 1 A recession is defined as a period in which the economy is growing

Homework Problems 10 - Roxana Canales Macroeconomics...

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Roxana Canales Macroeconomics Homework 10 Review Questions 1. A recession is defined as a period in which the economy is growing at a rate significantly below normal. An expansion is a period in which the economy is growing at a rate significantly above normal. The beginning point of a recession is called a peak and the ending point is called a trough. In a post war United States expansions have been longer than recessions. 4. During a recession the natural unemployment is not affected, while the cyclical unemployment rate rises. The inflation rate declines following a recession and the poll ratings of the president will decline because of a recession. 5. False, because when output equals potential output, the unemployment rate equals the natural unemployment rate. Cyclical unemployment is zero when output equals potential output. 6. If natural rate of unemployment is 5% and output is 2% below potential output,
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