An Expanding Economy Requires More Workers

question 55

Multiple Choice

An expanding economy requires more workers. If the supply of workers becomes inadequate to meet the demand, what is the likely impact on the economy?

• A) an economic slowdown is likely
• B) employment trends will reverse and unemployment will occur
• C) government deficits will result from capacity utilization
• D) inflation may result from upward wage pressures

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Definitions:

Service Cost Component

The element of pension expense that represents the present value of benefits attributed by the pension plan formula to employee service during the period.

Defined Benefit Pension Plan

A type of pension plan where an employer promises a specified pension payment upon retirement, based on the employee's earnings history and tenure.

Return On Plan Assets

A measure of the earnings generated from the investments within a pension fund, indicating the efficiency and performance of the asset management.

Pension Expense

The cost recognized in an employer's financial statements for the benefits provided to employees during a period.