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What is the general relationship between the business cycle and unemployment and​ inflation? A. During a​ recession, unemployment and inflation increase. B. During an​ expansion, unemployment and inflation increase. C. During an​ expansion, unemployment falls and inflation increases. D. During a​ recession, unemployment and inflation decrease.

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Answer:

A. During a​ recession, unemployment and inflation increase.

Explanation:

  • The recession in a business cycle is mainly caused by the decline in economic activity and is associated with the decline in widespread spending. That may be triggered by events such as the financial crisis or a burst in the economic bubble.
  • Due to the cause of the recession, the cause of job loses and unemployment tends to occur and this is due to the political or economic instability in the economy at large.
  • As an example of the economic recession of the US when the collapse of Lehman brothers since then until today the world is not able to recover completely.

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