Macroland's Unemployment Rate Is 7

question 55

Multiple Choice

Macroland's unemployment rate is 7%. The breakdown into different types of unemployment is frictional 3%, structural 2.5%, and cyclical 1.5%. Based on this data, what is the natural rate of unemployment in Macroland?

• A) 7%
• B) 5.5%
• C) 4.5%
• D) 4%

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Definitions:

Absorption Costing

A financial methodology that includes every cost related to producing a product—direct materials, direct labor, and both kinds of overhead expenses (variable and fixed), into the product’s final cost.

Ending Finished Goods

Ending Finished Goods are the inventory of completed products that are available for sale at the end of an accounting period.

Net Operating Income

This is the profit a company makes from its operations, after all operating expenses have been subtracted from revenues but before taxes and interest are deducted.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, indicating how much revenue is contributing to fixed expenses and net income.