Which of the Following Explains the Cause of the Change

question 23

Multiple Choice

Which of the following explains the cause of the change in the unemployment rate at the end of a recession?

• A)Firms are hesitant to rehire laid off workers as they continue to operate below capacity.
• B)Firms rapidly hire new workers at the first sign of an increase in demand for their goods.
• C)Discouraged workers return to the labor force,and this makes the unemployment rate fall.
• D)Discouraged workers leave the labor force,and this makes the unemployment rate rise.

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Definitions:

Exercise Price

The price at which an option holder can buy (call option) or sell (put option) the underlying asset.

Intrinsic Value

The actual, true value of a company or an asset based on underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors.

Pure Discount Loan

A type of loan where the borrower receives a sum of money upfront and repays a greater amount at the end of the term, with no periodic interest payments.

Face Value

The nominal or original value stated on a financial instrument, such as a bond or stock certificate.