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:

Political Process

The mechanisms, activities, and institutions through which citizens and groups use power to influence government and policy.

Logrolling

A practice in politics whereby individuals or groups exchange support or favors, especially in legislative contexts.

Subsidizing

The act of providing financial support, typically by the government, to reduce the cost of producing goods or services, making them more affordable to the public.

Economically Inefficient

refers to a scenario where resources are not optimally utilized, leading to waste or missed opportunities for better outcomes.