Unemployment Is a Lagging Indicator Because Firms

question 22

Multiple Choice

Unemployment is a lagging indicator because firms:

• A) always limit their responses to changes in the economy.
• B) do not look at economic conditions when making hiring decisions.
• C) may first try to decrease or increase the hours of existing employees before changing levels of employment.
• D) often wait for government subsidies before changing levels of employment.

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Definitions:

Sales Tax

A tax imposed on sales of goods and services, usually calculated as a percentage of the purchase price paid by the consumer.

Country Population

The total number of people living within the borders of a specific country at a given time.

Stock Variable

A quantity measured at one specific time, representing a certain amount accumulated up to that time.

Money Supply

The total amount of monetary assets available in an economy at a specific time.