Question

The unemployment rate is an important economic statistic that can tell us about the health of the economy. If the unemployment rate turns out to be high or higher than anticipated, we would expect __________.

Answer 1

Answer:

The correct answer is letter "B": the stock prices are more likely to fall.

Explanation:

The unemployment rate is the number of unemployed people in the workforce pursuing a job. Looking for a position involves getting in touch with employers or government departments, going on interviews or sending out applications. The unemployment rate is a lagging economic indicator. It is a metric that shifts a few months after a change of direction in the economy.

High or higher than anticipated unemployment rate implies companies had to incur in layoffs or are not hiring anymore because of a decrease in production. Under such scenarios, investors those entities lose their appeal in the eyes of investors decreasing the demand for corporate securities like stocks which will decrease the price of stocks.

Answer 2

Economic growth.If there is an increase in employment, that means there is an increase in productivity, which where we might be able to assume an increase in efficiency in markets.