As the Unemployment Rate Increases

question 56

Multiple Choice

As the unemployment rate increases,

• A)potential GDP decreases.
• B)real GDP decreases.
• C)both real GDP and potential GDP decrease.
• D)potential GDP increases.
• E)full employment GDP decreases.

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Definitions:

Risk of Obsolescence

The risk that a product, service, or technology will become outdated or no longer useful, often due to advancements in technology.

Debt to Stockholders' Equity Ratio

A financial ratio that measures the proportion of a company's total debt to its shareholders' equity, indicating the financial leverage of the company.

Current Ratio

The Current Ratio is a measure of liquidity that assesses a company's capacity to cover short-term liabilities or debts due within the next year.

Capital Lease

A lease agreement that is treated like an asset purchase for accounting purposes because it meets certain criteria, leading to the lessee recognizing the leased asset on their balance sheet.