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2.1. Explain the changes in the following economic variables with proper justification during Peaks of Business cycle in the diagram. A) Inflation B) Unemployment rate C) Employment level in the country D) Aggregate demand of the country E) Aggregate supply in the country

2.1. Explain the changes in the following economic variables with proper justification during Peaks of Business cycle in the diagram. A) Inflation B) Unemployment rate C) Employment level in the country D) Aggregate demand of the country E) Aggregate supply in the country

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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2.1. Explain the changes in the following economic variables with proper justification during Peaks of Business cycle in the diagram. A) Inflation B) Unemployment rate C) Employment level in the country D) Aggregate demand of the country E) Aggregate supply in the country
Transcribed Image Text:2.1. Explain the changes in the following economic variables with proper justification during Peaks of Business cycle in the diagram. A) Inflation B) Unemployment rate C) Employment level in the country D) Aggregate demand of the country E) Aggregate supply in the country
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Step 1

During peak business cycles, there is higher GDP, increasing growth rate and lower level of unemployment.

a.

Inflation: during peaks of business cycle, inflation is higher.

b.

Unemployment rate: during peaks of business cycle as stated above, unemployment rate is lower.

 

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