An Increase in Cyclical Unemployment Will Result in

question 257

Multiple Choice

An increase in cyclical unemployment will result in

• A)an increase in the natural rate of unemployment.
• B)an increase in the unemployment rate.
• C)an increase in structural unemployment.
• D)a decrease in frictional unemployment.

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Definitions:

U-Shaped AVC

The U-Shaped Average Variable Cost curve represents how the per-unit production expenses initially decrease due to increasing returns and subsequently increase after reaching a certain scale due to diminishing returns.

Perfectly Competitive

A perfectly competitive market is one with many buyers and sellers, where no single entity can influence the market price, and all products are identical.

Profit-Maximizing

A strategy or approach focused on increasing a firm’s profits to the highest possible level given its production costs and market demand.

Downward-Sloping

A characteristic of demand curves where price and quantity demanded move in opposite directions.