A Survey Reveals That, on a Small Island, Initially 100

question 231

Multiple Choice

A survey reveals that, on a small island, initially 100 people have jobs, 25 people don't have jobs but are looking for jobs, and 45 people are neither working nor looking for work. Suppose that 15 of the 45 people who weren't looking for work now begin looking for work. There are now 40 people looking for work and 100 people working. The unemployment rate:

• A) falls to 20%.
• B) rises to 28.6%.
• C) rises to 50%.
• D) Nothing happens to the unemployment rate because these people weren't working before and they aren't working now.

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Definitions:

DuPont Formula

A financial analysis method that breaks down Return on Equity into three parts: operating efficiency, asset use efficiency, and financial leverage.

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated as the return from an investment divided by the cost of the investment.

Negotiated Price

The final price at which a transaction is made between buyer and seller after discussion and agreement.

Investment Center Performance

Involves the evaluation of a business unit's effectiveness in generating profits and efficiently managing its capital investments.