Suppose the Natural Rate of Unemployment Is 5 Percent

question 172

Multiple Choice

Suppose the natural rate of unemployment is 5 percent. If the actual unemployment rate is 4 percent, then the cyclical unemployment rate is

• A)9 percent.
• B)1 percent.
• C)-1 percent.
• D)0 percent as cyclical unemployment cannot be less than zero.

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Definitions:

Trade-In Allowance

The value subtracted from the price of a new item when an old item is given as part of the deal.

Book Value

The net value of an asset or company calculated by total assets minus intangible assets (patents, goodwill) and liabilities.

Accumulated Depreciation

The total amount of depreciation expense that has been charged to a fixed asset since it was in service, reducing its book value.

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in its life, reflecting the loss of value over time.