Growth Domestic Product (GDP), also known as aggregate output that means the total quality of goods and

services produced in the economy in a given period. While, unemployment rate is the percentage of the total labor force that is unemployment but actively seeking employment and willing to work. When growth domestic product decrease, there are fewer goods and services to go around and the average standard of living declines. Needless to say, when the firms cut back on production, they also lay off workers and totally given effect to the rate of unemployment which are increase. Besides, there are also have four independent variables that affect unemployment which are consumption, investment, government spending, and trade. Based on the business cycle figure above that shows a positive trend where the peak of a growth domestic product cycle in 2001 is higher than the peak of the previous growth years. During expension, the output and employment are grow. That will shown in 1999,2005 and 2010 where the unemployment rate in Malaysia are decrease. However, when recession was happened, where the output and employment was fall, we can see that the growth domestic product cycle is decrease while the unemployment rate is increase in 2009. But, when contraction comes, it may be fast and sharp, while expension may be slow and gradual. It will be make the ups and downs in the economy tend to be erratic like shown in 2002 until 2008.