Factors influencing rapid growth in output

Explanation

During a business expansion, business sales tend to rise, GDP grows rapidly and the rate of unemployment declines.

The correct answer is D. During periods of rapid growth in output, employment generally increases, while unemployment decreases.

During periods of rapid growth in output, businesses typically experience increased demand for goods and services. To meet this increased demand, businesses often need to expand their operations, invest in new projects, and hire additional workers. As a result, employment tends to increase.

When businesses expand and hire more workers, individuals who were previously unemployed are more likely to find job opportunities and secure employment. Therefore, the level of unemployment generally decreases during periods of rapid output growth.

It is important to note that this relationship between output growth and employment/unemployment is not always consistent in the short term. There might be temporary fluctuations or lags in the labor market as businesses adjust to changing conditions. However, over the long term and in the context of rapid growth in output, the general pattern is that employment increases while unemployment decreases.

Option A is incorrect because there is usually a relationship between output growth and employment/unemployment, although it may not always be consistent.

Option B is incorrect because during periods of rapid output growth, businesses typically expand and hire more workers, leading to increased employment and decreased unemployment.

Option C is incorrect because employment generally increases, rather than decreases, during periods of rapid output growth.

Option E is incorrect because both employment and unemployment generally fall during periods of rapid output growth.

In summary, during periods of rapid growth in output, employment generally increases, while unemployment decreases as businesses expand and hire more workers to meet increased demand.