If There Is Unemployment and All Businesses Are Operating at Less

question 145

Multiple Choice

If there is unemployment and all businesses are operating at less than full capacity, then

• A) there are too many workers, and some people ought to leave the labor force.
• B) we are not experiencing a net social cost to unemployment because it is offset by the capacity levels of the factories.
• C) society is producing inside its production possibilities curve.
• D) society is at the wrong point on the production possibilities curve.

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Definitions:

Business Risk

The potential for financial loss in operating a business, arising from factors such as changes in market demand, costs, competition, and regulatory environment.

Entrepreneurs

Individuals who start, organize, and manage new business ventures, taking on financial risks in the hope of profit.

Earthquake Insurance

A type of property insurance that covers damage to a building and its contents caused by seismic activities.

Tolerance for Risk

The degree to which an individual or organization can withstand risk, particularly in investment, without experiencing adverse effects.