Employment tends to rise whenGroup of answer choicesaggregate output falls.unemployment rises.aggregate output rises.labor productivity falls.
Question
Employment tends to rise when
Group of answer choices
- aggregate output falls.
- unemployment rises.
- aggregate output rises.
- labor productivity falls.
Solution
To approach this question, we can break down the relationship between employment, aggregate output, and other economic indicators.
Understanding the Options
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Aggregate Output Falls: If aggregate output (the total value of goods and services produced) falls, typically employment would likely decrease, not increase. Fewer goods and services can lead to layoffs or hiring freezes.
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Unemployment Rises: If unemployment rises, that indicates that fewer people are employed, which contradicts the idea that employment would rise; therefore, this option is not correct.
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Aggregate Output Rises: Increasing aggregate output typically signifies a growing economy where businesses are producing more, often leading to increased hiring. This option is the most plausible for rising employment levels.
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Labor Productivity Falls: While lower productivity may suggest that each worker is producing less, this does not directly correlate with employment levels. In many cases, companies may retain employees even if productivity decreases.
Final Analysis
Based on this analysis, the most logical conclusion is that employment tends to rise when aggregate output rises. This indicates economic growth, which usually results in higher demand for labor as companies expand to meet increased production needs.
Final Answer
The correct answer is: aggregate output rises.
Similar Questions
During the expansion phase of a business cycleGroup of answer choicesAll options are correctAggregate output increasesWages decreasesUnemployment increases
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