Question 1
During the recession of 2008-2009, cyclical unemployment increased as the recession continued. This increase in cyclical unemployment would have
◦ decreased the natural rate of unemployment.
◦ increased the natural rate of unemployment.
◦ had no effect on the natural rate of unemployment.
◦ either increased or decreased the natural rate of unemployment.
Question 2
During a recession
◦ consumption tends to rise.
◦ investment tends to fall.
◦ exports tend to fall.
◦ imports tend to rise.
