What Is the Likely Consequence of an Unemployment Rate Falling

question 1

Multiple Choice

What is the likely consequence of an unemployment rate falling below the rate at which "full employment" is achieved?

• A)The threat of recession.
• B)Increased inflationary pressures.
• C)An increase in discouraged workers.
• D)None of the choices are correct.

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Definitions:

Variable Expense

Costs that vary depending on a company's production volume or activity level.

Target Profit

The anticipated profit figure set by a business for a given period, often guiding pricing and production decisions.

Monthly Fixed Expense

Expenses that do not vary with production volume or business activity level, incurred on a monthly basis.

CM Ratio

Contribution margin ratio, showing the portion of sales revenue that is not consumed by variable costs and contributes to covering fixed costs.