Suppose the Country of Tiny Town Experiences Frictional Unemployment

question 103

Multiple Choice

Suppose the country of Tiny Town experiences frictional unemployment.This frictional unemployment would

• A)decrease the output gap.
• B)signal that the country is in a recession.
• C)increase structural unemployment.
• D)signal the number of discouraged searchers is growing.
• E)be considered a natural occurrence in a growing economy.

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Definitions:

Economic Profit

The profit a company makes after deducting both its explicit (actual cash outflows) and implicit (opportunity) costs.

Profit Motive

The driving force behind business activities focused on achieving financial gain.

Long-Run Economic Profit

The sustainable profit a firm earns over time, assuming entry and exit in the market are possible and adjustments have been made.

Self-Interest

An individual's personal gain or advantage, especially when pursued without regard for others.