QQuestionEconomics
QuestionEconomics
Which of the following statistics can turn negative?
inflation rate
GDP
CPI
unemployment rate
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Answer
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Step 1: Identify the statistics given and their typical ranges.
The statistics provided are inflation rate, Gross Domestic Product (GDP), Consumer Price Index (CPI), and unemployment rate. Generally, inflation rate and unemployment rate can be negative, while GDP and CPI are not.
Step 2: Explain why some statistics can be negative.
- Inflation rate: This is the annual percentage change in the general price level of goods and services in an economy. While it's usually positive, it can be negative in some cases, which is known as deflation. Deflation occurs when the general price level falls over time. - GDP: This is the monetary value of all the finished goods and services produced within a country's borders in a specific time period. GDP is not negative because it represents the economic output of a country, which is always a positive value. - CPI: This measures the average change in prices of a basket of consumer goods and services over time. Similar to GDP, CPI cannot be negative because it represents price levels, which are always positive. - Unemployment rate: This is the percentage of the labor force that is jobless, actively seeking employment, and available for work. The unemployment rate can be negative, which would mean that there are more people working than the total labor force. However, a negative unemployment rate is not possible because the labor force consists of both employed and unemployed individuals.
Final Answer
The only statistics from the given options that can turn negative are the inflation rate (deflation) and the unemployment rate (however, a negative unemployment rate is not practically possible). GDP and CPI cannot turn negative because they represent economic output and price levels, respectively, which are inherently positive values.
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