The Difference Between the Official Unemployment Rate and the Alternate

question 15

Multiple Choice

The difference between the official unemployment rate and the alternate measure of unemployment that includes discouraged workers and underemployed workers

• A) equals zero when there is no cyclical unemployment.
• B) shows that there are no shortcomings with the official unemployment rate.
• C) grows when the economy enters an expansion.
• D) shows short-term and long-term unemployment spells.
• E) grows when the economy enters a recession.

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Definitions:

Competitive Increasing-cost Industry

An industry where supply costs increase as output expands, often because resources become scarcer or harder to obtain as production grows.

Long-run Equilibrium

A state in which all firms in a perfectly competitive market earn zero economic profits, with no incentives for new firms to enter or existing firms to exit.

Decrease in Demand

A situation where consumers' willingness and ability to purchase a product at all price levels declines, represented by a leftward shift of the demand curve.

Constant-cost Industry

An industry in which the input prices and production costs remain stable even as the industry output changes.