The correct answer is B) Unemployment rates increase during a contraction and decrease during an expansion.
The statement that best describes the correlation between phases of the business cycle and the unemployment rate is this: "Unemployment rates increase during a contraction and decrease during an expansion."
Let's have in mind that when we are referring to the economic term "business cycle" we are talking about the different phases or cycles that encompass the economy of a country. During this cycle, the economy passes through a series of ups and downs in economic activity.
These cycles have the following stages. An expansion, peak, contraction, and trough. When the economy is in expansion, companies offer many jobs, they are selling well, they are generating constant income, so the creation of jobs makes unemployment decrease. However, during a contraction of the economy, companies lay off employees, and unemployment rates increase.
Unemployment is the situation in the working economy where the capable and eligible candidates do not get jobs. It can also be said as the lack of vacancy in the entire economy for jobs. Unemployment can also be due to a lack of knowledge in the candidates as per the job positions.
The correct correlation between the business cycle and the unemployment rate is correct in:
Option B) The unemployment rate increases during a contraction and will decrease during expansion.
Reason:
In the business cycle, there are various phases in which the economy passes through. There are a series of ups and downs in the economic activities to various factors that affect the business. When the business cycle moves up and down the unemployment rate also gets affected.
In the business cycle, the time of expansion is the time when the economy or the business is rising at a peak; thus during this time the companies offer many jobs, sell well, and generate constant incomes this leads to a decrease in unemployment rate.
In the case of contraction, it is a tough time for the businesses to generate income and to sell at a higher capacity, due to this companies lay off the employees, which will ultimately increase the unemployment rate.
To know more about the unemployment rate, refer to the link:
https://brainly.com/question/17255561?
