If the Full-Employment Rate of Unemployment Is 5 Percent,and the Economy

question 67

Multiple Choice

If the full-employment rate of unemployment is 5 percent,and the economy is experiencing a 7 percent unemployment rate,what is the rate of cyclical unemployment?

• A) 7 percent
• B) 12 percent
• C) -2 percent
• D) 5 percent
• E) 2 percent

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Definitions:

Subscription Price

The price at which existing shareholders can buy more shares of stock in a rights issue before it is offered to the public.

Rights Offering

A financing process in which a company offers existing shareholders the opportunity to purchase additional shares directly, usually at a discount and before the general public.

Institutional Investors

These are entities such as pension funds, mutual funds, insurance companies, and endowments that invest large amounts of money on behalf of individuals.

Private Placements

Private placements refer to the sale of securities to a relatively small number of select investors as a way of raising capital, without needing to publicly register the securities.