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Chapter 8: Q 31 (page 215)

Is a decrease in the unemployment rate necessarily a good thing for a nation? Explain.

Short Answer

Expert verified

Unemployment rate depicts percentage of individuals unemployed in total labor force.

Step by step solution

01

Step 1. Definition  

Unemployed people: People who are looking for job but are not able to find it.

02

Step 2. Discouraged workers 

Those workers who are eligible for jobs but have they have stopped looking for job because they might not find suitable options they are looking for.

03

Step 3. Reason 

Increase in unemployment does not always means country is not doing good. Discouraged workers are not considered as unemployed nor they are included in labor force. So despite of bad economic conditions unemployment rate will fall.

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Most popular questions from this chapter

Is the higher unemployment rates for minority workers necessarily an indication of discrimination? What could be some other reasons for the higher unemployment rate?

The U.S. unemployment rate increased from 4.6%

in July 2001 to 5.9% by June 2002. Without studying the subject in any detail, would you expect that a change of this kind is more likely to be due to cyclical unemployment or a change in the natural rate of unemployment? Why?

When would you expect cyclical unemployment to be rising? Falling?

Using the above data, what is the unemployment rate? These data are U.S. statistics from 2010. How does it compare to the February 2015 unemployment rate computed earlier?

Over the long term, has the U.S. unemployment rate generally trended up, trended down, or remained at basically the same level?
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