Higher Operating Leverage

question 4

Multiple Choice

Higher operating leverage:

• A) Should be lowered
• B) Increases risk of loss if operations are near the breakeven point
• C) Reduces risk of loss if operations are near the breakeven point
• D) Does not affect the risk of loss regardless of the level of operations

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Definitions:

Labor Underutilization

A situation where workers' skills, time, or abilities are not fully utilized in their current employment situation.

Labor Underutilization

A broader measure of unemployment that includes people who are not actively looking for work, but who would work if a job was available, and part-time workers who would prefer full-time positions.

Labor-Force Participation Rate

The rate of the labor force participants who are of working age, encompassing those in employment and those actively searching for a job.

Unemployment Rate

The proportion of the labor force that remains unemployed and is actively looking for ways to gain employment.