What Would Be the Most Likely Effect of an Increase

question 107

Multiple Choice

What would be the most likely effect of an increase in the world price of oil, which would create a sectoral shift?

• A) There would be a decrease in unemployment, and the decrease would be greater in a country with unemployment insurance than in one without.
• B) There would be a decrease in unemployment, but the decrease would be smaller in a country with unemployment insurance than in one without.
• C) There would be an increase in unemployment, and the increase would be greater in a country with unemployment insurance than in one without.
• D) There would be an increase in unemployment, but the increase would be smaller in a country with unemployment insurance than in one without.

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Definitions:

Book Value

The value of an asset as recorded on a company's balance sheet, calculated as the cost of an asset minus accumulated depreciation.

Double Declining-balance

An accelerated method of depreciation where an asset's book value is reduced at double the rate of its straight-line depreciation.

Accelerated Depreciation

A method of depreciation used for accounting or income tax purposes that allows higher deductions in the earlier years of the useful life of an asset.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.