The Difference Between the Official Unemployment Rate and the Alternate

question 15

Multiple Choice

The difference between the official unemployment rate and the alternate measure of unemployment that includes discouraged workers and underemployed workers

• A) equals zero when there is no cyclical unemployment.
• B) shows that there are no shortcomings with the official unemployment rate.
• C) grows when the economy enters an expansion.
• D) shows short-term and long-term unemployment spells.
• E) grows when the economy enters a recession.

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Definitions:

Effective Interest Method

An accounting technique used to allocate the discount or premium on bonds payable or receivable over their life, reflecting the actual interest rate over the period.

Amortization

The process of spreading out a loan or intangible asset cost over its useful life.

Bond Discount

The variance between a bond's official value and the reduced price at which it is actually sold.

Present Value

Present value is a financial concept that describes the value of an expected income stream determined as of the date of valuation.