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In this chapter, we learned about Aggregate Supply and Demand and Business Cycles. Below are two graphs showing unemployment and GDP growth data. The gray areas show time periods when the United States experienced recessions. Look at the graphs above and answer the following questions using complete sentences. Make sure to number your responses. FRED - Unemployment Rate 15.0 12.5 10.0 Percent 7. 5. www 25 0.0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Shading indicates U.S. recessions; the most recent one is ongoing Source: U.S. Bureau of Labor Statistics fred.stlouisfed.org FRED- Real Gross Domestic Product 10 Percent Change from Preceding Period -10 20 -30 .40 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Shading indicates U.S. recessions; the most recent one is ongoing. Source: U.S. Bureau of Economic Analysis fred.stlouisfed.org1. What happens to the unemployment rate when there is a recessionary period? (2 points) 2. What happens to GDP in recessionary periods? (2 points) 3. Approximately how much did the unemployment rate change during the Great Recession (2008-2009)? (2 points) 4. Approximately how much did GDP growth dip during the Great Recession (2008 - 2009)? (2 points) 5. In September 2008 the CPI was approximately 219 and in March 2009 the CPI was approximately 212. Does this indicate that the great recession was a result of decreasing Aggregate Demand or decreasing Short-Run Aggregate Supply? (2 points) Hint: Draw yourself an AD/AS graph and then see which line shifting to the left causes the price level to decrease. 4 Previous Next >