Consider a Broom Factory That Permanently Closes Because of Foreign

question 10

Multiple Choice

Consider a broom factory that permanently closes because of foreign competition. If the broom factory's workers cannot find new jobs because their skills are no longer marketable, then they are classified as:

• A) seasonally unemployed.
• B) frictionally unemployed.
• C) structurally unemployed.
• D) cyclically unemployed.

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Definitions:

Call Premium

The extra amount over the bond's face value that investors must pay to call away a bond before its maturity date.

Term Structure

The connection between different terms or maturities and interest rates or bond yields.

Fisher Formula

An equation used to identify the nominal interest rate or the required rate of return on an investment, taking inflation into account to determine the real interest rate.

Coupon

The interest rate on a bond, usually expressed as a percentage of the face value and paid at regular intervals.