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Chapter 1: Problem 6

Which of these best describes the post-World War II recessions in the United States? ( \(\mathrm{LO} 4,5)\) a) They were all very mild, except for the 1981-82 recession. b) They were all caused by rising interest rates. c) None lasted more than one year. d) Each was accompanied by a decline in output of goods and services and an increase in unemployment.

Short Answer

Expert verified
Option (d) Each post-World War II recession was accompanied by a decline in output of goods and services and an increase in unemployment.

Step by step solution

01

Option A

They were all very mild, except for the 1981-82 recession. This statement is NOT completely true. While the 1981-82 recession was particularly severe, other post-WWII recessions such as the 1973-75 and the 2007-2009 recessions were not "very mild."
02

Option B

They were all caused by rising interest rates. This statement is NOT true. Though rising interest rates played a role in some of the recessions, they were not the sole cause of all post-WWII recessions. For example, the 2007-2009 recession was primarily caused by the housing market bubble and the financial crisis, not rising interest rates.
03

Option C

None lasted more than one year. This statement is NOT true. Several post-WWII recessions lasted longer than one year, including the 1973-75, the 1981-82, and the 2007-2009 recessions.
04

Option D

Each was accompanied by a decline in output of goods and services and an increase in unemployment. This statement is TRUE. A recession is typically defined as a period of negative growth in GDP, which means a decline in the output of goods and services. Recessions are also commonly associated with an increase in unemployment rates, as businesses cut back on hiring and may lay off workers. So, the best answer to this question is: (d) Each was accompanied by a decline in output of goods and services and an increase in unemployment.

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Most popular questions from this chapter

The inflation rate declined during the presidency of (LO5) a) both Eisenhower and Reagan b) neither Eisenhower nor Reagan c) Reagan d) Eisenhower

In the \(1970 \mathrm{~s}\), our economy suffered from (LO5) a) inflation but not stagnation b) stagnation but not inflation c) inflation and stagnation d) neither inflation nor stagnation

Which statement is true? \((\mathrm{LO} 4,5)\) a) There was a great deal of stagflation in the \(1970 \mathrm{~s}\). b) We had full employment for most of the \(1980 \mathrm{~s}\). c) We have had seven recessions since World War II. d) None of the above.

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