Scenario: Consider Country a with a Population of 2 Million

question 191

Multiple Choice

Scenario: Consider Country A with a population of 2 million people. In Country A, there are 1.5 million people employed; 0.3 million younger than 18, in school or retired; 0.1 million voluntarily unemployed; and 0.1 million people officially unemployed.
-Refer to the scenario above.If the market clearing wage rate in Country A decreases,what is most likely to happen to the number of voluntarily unemployed people and the number of officially unemployed people?

• A) Both numbers would increase.
• B) The number of voluntarily unemployed people would decrease, and the number of officially unemployed people would increase.
• C) The number of voluntarily unemployed people would increase, and the number of officially unemployed people would decrease.
• D) The number of voluntarily unemployed people would stay the same, and the number of officially unemployed people would increase.

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Definitions:

Literacy Rate

The percentage of people within a population who have the ability to read and write.

Production Possibilities Curve

A graphical representation that shows the maximum number of goods or services that can be produced within an economy given available resources and technology.

Full Employment

A situation in which everyone who wants to work can find employment at prevailing wage rates.

Serious Recession

A drastic downturn in economic activity across the economy that lasts for an extended period, often characterized by significant declines in GDP and other economic indicators.