Final answer:
The correct answer is option 1) up.
Step-by-step explanation:
Retained earnings are a company's cumulative net earnings or profit after accounting for dividends. Therefore, when a company makes income, retained earnings go up. This occurs because the company retains a portion of its profit rather than distributing it all to shareholders as dividends. Retained earnings are an important part of shareholders' equity and can be reinvested into the company to fuel future growth.
As for the historical trend of the U.S. unemployment rate, over the long term, it has neither consistently trended up nor down but has fluctuated according to economic cycles. There have been periods of relatively high unemployment, such as during recessions, and periods of low unemployment during economic booms. It's important to consider the impact of economic policies, labor market dynamics, and international events when examining unemployment trends.