What Does an Unemployment Rate Decrease Mean

question 41

Multiple Choice

What does an unemployment rate decrease mean?  

• A) The number of persons classified as unemployed increases. 
• B) The number of unemployed decreases relative to the size of the labour force. 
• C) The size of the population decreases and the number of persons classified as employed remains the same. 
• D) The size of the labour force decreases.

---

Definitions:

Inflation

The pace at which prices for general goods and services ascend, thus diminishing the capability to purchase.

Real Interest Rate

The interest rate adjusted for the inflation rate, reflecting the real cost of borrowing and the real yield to lenders or investors.

Nominal Interest Rate

The rate of interest before adjusting for inflation, representing the face value of interest payments.

Inflation Rate

The tempo at which the broad cost of goods and services rises, leading to a downfall in purchasing strength.