Unemployment Is a Lagging Indicator Because

question 75

Multiple Choice

Unemployment is a lagging indicator because:

• A) employers wait to see how bad a recession looks before making the difficult decision to lay off workers.
• B) employers wait to see how solid a recovery looks before committing to take on new employees.
• C) firms may first try to decrease or increase the hours of existing employees before changing levels of employment.
• D) All of these are reasons that make unemployment a lagging indicator.

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Definitions:

Buildings

Physical structures used for business operations or investment, considered as fixed assets on a company's balance sheet.

Partial Equity Method

An accounting method that recognizes the initial investment at cost and incorporates the investor's share of the investee's net income or losses to some extent, not fully as in the full equity method.

Noncontrolling Interest

A minority share of ownership in a subsidiary that is not enough to control its operations, held by investors outside of the parent company.