Why Does Unemployment Tend to Change When the Level of Output

question 65

Multiple Choice

Why does unemployment tend to change when the level of output changes?

• A)Persons wish to buy things, and if output falls, people need to work less to earn the income to buy the smaller output.
• B)Labor is an input, and if output falls, employers need fewer workers to make it, so the employment falls.
• C)When output rises, persons are more interested in buying, and will work more to earn the income to buy things.
• D)Persons face the option of buying or working, so that when they do more of one, the other necessarily falls.
• E)When companies replace workers with machines, output rises, and people take time off from work to buy before returning to employment.

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Definitions:

Net Book Value

The net book value is the value at which an asset is carried on a balance sheet, calculated as the original cost minus accumulated depreciation and impairment losses.

Carrying Value

The net amount at which an asset or liability is reported in the financial statements, factoring in its original cost and any related depreciation, amortization, or impairment costs.

Useful Life

The estimated period over which an asset is expected to be functional and contribute to the operations of a business, beyond which it might be deemed obsolete.

Consolidated Financial Statements

These are financial statements that aggregate the financial position and operations of a parent company and its subsidiaries, providing a comprehensive overview as if the group were a single entity.