A Difficulty Faced by Policymakers Who Wish to Use the Unemployment

question 2

Multiple Choice

A difficulty faced by policymakers who wish to use the unemployment rate as a guide to whether the economy is weak or strong is that

• A)the natural rate of unemployment is hard to measure.
• B)the natural rate of unemployment almost never changes.
• C)policymakers must use data on output to tell whether the unemployment rate is too high or too low.
• D)the impact of policy on the economy is subject to long and variable lags.

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Definitions:

Moderate Relationship

A term describing a level of correlation between two variables that is neither weak nor strong, suggesting some degree of association but not a perfect or near-perfect linear relationship.

Debt-Equity Ratio

An assessment ratio depicting the usage rates of equity and debt in the financing of a company's assets.

Return on Assets

A financial ratio indicating how profitable a company is relative to its total assets, showing how efficient management is at using its assets to generate earnings.

Return on Equity

ROE (Return on Equity) indicates a company's profit efficiency by showing the amount of profit made from shareholders' investments.