Which of the Following Is a Cost of Unemployment to the Economy

question 31

Multiple Choice

Which of the following is a cost of unemployment to the economy?

• A) The opportunity cost of unemployment.
• B) The tax and benefits effect.
• C) The reverse multiplier effect.
• D) All of the above.

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Definitions:

Opportunity Cost

The value of the next best alternative forgone as a result of making a decision, reflecting the trade-offs of choosing one option over another.

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors, underpinning international trade.

Specialization

The practice of focusing on and becoming expert in a particular subject or skill, in economics, it refers to individuals or firms concentrating on the production of limited kinds of goods or services.

Absolute Advantage

The ability of an individual, company, or country to produce a good or service at a lower cost per unit than others.