Which of the Following Explains Why the Unemployment Rate Tends

question 193

Multiple Choice

Which of the following explains why the unemployment rate tends to rise as a recession ends?

• A)Discouraged workers begin to search for jobs.
• B)The federal government uses a different definition of "unemployed" during recession.
• C)Employment insurance tends to be more generous during recessions.
• D)The birth rate tends to rise during recessions.
• E)Firms reducing hiring as recessions come to an end.

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Definitions:

Capital Budget

The process and plan for allocating resources for major investments or projects that a company undertakes to maintain or expand its operations.

Optimal Capital

The best mix of debt, equity, and other financing sources to maximize a firm’s value while minimizing its cost of capital.

Swaps

Financial derivatives where two parties agree to exchange cash flows or other financial instruments for a set period of time.

Currency Swaps

Bilateral agreements to exchange periodic payments where the payments are based in two different currencies.