As the Unemployment Rate Rises

question 174

Multiple Choice

As the unemployment rate rises,

• A)real GDP also rises.
• B)nominal GDP rises.
• C)the employment rate rises.
• D)lost national output rises.

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Definitions:

Tax Incidence

The analysis of the effect of a particular tax on the distribution of economic welfare, focusing on who ultimately bears the burden of the tax.

Externality Analysis

The study of costs or benefits that affect parties who did not choose to incur that cost or benefit, typically used in the context of environmental and public policy.

Public Interest Theory

A theory suggesting that regulation is supplied in response to the demand of the public for the correction of inefficient or inequitable market practices.

Excise Tax

A tax on the sale or consumption of specific goods or services, such as tobacco, alcohol, and fuel.