Question

The figure shows aggregate output for the first quarter in 1970 until the fourth quarter in 2017 Recessions are highlighted in the figure by the gray boxes 16000 15.000 Recessary - Recensionary period 1980 IV 1975 Recenionary 2008-2009 ID Recessionary period CON IL Recessionary period 2001-2011 19701 1975 1 19T JOSI 19001 1995T Quen O ST 20101 20151 27 IV According to the figure, during the recessionary periods, aggregate output O A grow at the same rate as all other periods B. steadily increased OC. decreased by the same amount in each recession OD. stagnated or declined Click to select your answer

Answer 1

Correct Answer - D

A. Grew at the same rate as all other periods - This is incorrect because, in all the five recessionary periods, none saw any growth at the end compared to the beginning of the respective recession period.

B. Steadily increased - This is incorrect because, in all the five recessionary periods, none saw any steady growth in aggregate output.

C. Decreased by the same amount in all recession - This is incorrect because each recession lasted for a different amount of time duration and aggregate output declined by different amounts.

D. Stagnated or declined - This is correct because each recession period witnessed either a decline in aggregate output or stagnation (1980, 2000).