Which of the following statements is true?
A) The four phases of the business cycle, in order, are: peak, recovery, trough, recession.
B) When unemployment is rising then real GDP is rising.
C) The economic problem typically associated with a recovery is rising unemployment.
D) Full employment exists in an economy when the unemployment rate equals the sum of frictional, seasonal and structural unemployment rates.

Question

Quizplus · Accepted Answer

Full employment in an economy does not mean a 0% unemployment rate. Instead, it refers to the situation where the only types of unemployment are frictional, seasonal, and structural, indicating that everyone who wants a job at the current wage rates can find one. The other options are incorrect representations of economic concepts.

Which of the Following Statements Is True