During a Recession, People May Drop Out of the Labor

question 76

Multiple Choice

During a recession, people may drop out of the labor force because they are unable to find a job. All else being equal, this causes

• A)no change in the unemployment rate.
• B)the unemployment rate to increase.
• C)the unemployment rate to decrease.
• D)a decrease in the working-age population.
• E)an increase in the employment-to-population ratio.

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Definitions:

Fixed Overhead

Ongoing, recurring costs associated with operating a business that do not vary with production level or sales volume.

Direct Labor

The labor costs directly traceable to the production of goods or services, such as wages paid to workers or machine operators.

Fixed Overhead

Overhead expenses that remain constant regardless of a company's level of production or sales.

Raw Material

Basic materials used in the production process that are transformed into finished goods through manufacturing.