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If the US economy was growing at a rate of 2 percent or better in mid-1992,...

If the US economy was growing at a rate of 2 percent or better in mid-1992, how is it possible that unemployment was rising?

Please explain the specifics of the economy in the early to mid-1990s which caused unemployment to grow. Please be concrete, I will rate

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Answer #1

The US economy in the early 1990s was seeing growth in the rate of GDP. GDP from 1992-1994 was about 3%.
Despite having this rate of GDP, the rate of unemployment was also high in the economy. This was a contrasting effect that the economy was experiencing.

The reason for this was that this period saw increase in the use of capital equipment and more machinery for the purpose of production. So this led to increase in unemployment and replacement of labour with machinery.

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