When an Unemployed Worker Becomes Discouraged and Leaves the Labour

question 2

Multiple Choice

When an unemployed worker becomes discouraged and leaves the labour force,

• A) the unemployment rate increases.
• B) the labour force participation rate increases.
• C) the employment/population ratio decreases.
• D) the unemployment rate decreases.
• E) the employment/population ratio increases.

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Definitions:

Uncollectible Accounts

Accounts receivable that are considered unlikely to be collected and are written off as a bad debt expense.

Credit Sales

Sales where the customer is allowed to pay for the product or service at a later date, extending credit.

Bad Debt Expense

The estimated amount of accounts receivable that is not expected to be collected.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of accounts receivable that may not be collectible, reflecting potential losses due to credit sales.