When Output Increases by 1%, the Unemployment Rate Does Not

question 76

Multiple Choice

When output increases by 1%, the unemployment rate does not tend to fall by 1% in the short run because

• A) a firm is likely to meet some of the increase in output by increasing the number of hours worked per job.
• B) the number of people who become employed is less than the number of new jobs created.
• C) as output increases, the size of the labor force increases.
• D) all of the above

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Definitions:

Downward-Sloping Demand

A concept in economics that illustrates how demand for a good or service decreases as the price increases, assuming all other factors remain constant.

Monopoly

A monopoly is a market structure characterized by a single seller dominating the market, facing no competition, which can influence prices and control the supply of goods or services.

Monopolistic Competition

is a market structure characterized by many firms selling products that are similar but not identical, allowing for competition based on quality, price, and marketing.

Quantity of Output

The total amount of goods or services produced by a company or an economy in a given period.