Why Does Unemployment Tend to Change When the Level of Output

question 178

Multiple Choice

Why does unemployment tend to change when the level of output changes?

• A)Persons wish to buy things, and if output falls, people need to work less to earn the income to buy the smaller output.
• B)Labor is an input, and if output falls, employers need fewer workers to make it, so the employment falls.
• C)As output rises, more people are more interested in buying goods and services, and so these people work more to obtain the income needed to buy things.
• D)Persons face the option of buying or working, so that when they do more of one, the other necessarily falls.
• E)When companies replace workers with machines, output rises and people take more vacation time prior to returning to work.

---

Definitions:

Total Liabilities

The combined amount of all financial obligations a company owes to external parties, recorded on the balance sheet.

Total Assets

The sum of all assets owned by a company, including current and non-current assets, as reported on the balance sheet.

Revenues

The total amount of income generated by the sale of goods or services related to a company’s primary operations.

Expenses

The money spent or costs incurred in an entity's efforts to generate revenue, representing the cost of doing business.