When Output Increases by 1%, the Unemployment Rate Does Not

question 76

Multiple Choice

When output increases by 1%, the unemployment rate does not tend to fall by 1% in the short run because

• A) a firm is likely to meet some of the increase in output by increasing the number of hours worked per job.
• B) the number of people who become employed is less than the number of new jobs created.
• C) as output increases, the size of the labor force increases.
• D) all of the above

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Definitions:

Molten Rock

Rock heated to a liquid state by extreme temperatures, found in the Earth's mantle and crust, also known as magma when underground and lava when it reaches the surface.

Underground Body

A general term for any substantial accumulation of material or geological structure located beneath the Earth's surface.

Pluton

A subsurface magma body or the mass of rock in which it solidifies; synonym: intrusion.

Batholith

A large mass of intrusive igneous rock believed to have solidified deep within the earth.