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Chapter 8: Q.12 (page 214)

What happens to the unemployment rate when unemployed workers are reclassified as discouraged workers?

Short Answer

Expert verified

If unemployed workers become discouraged, then the measured percentage will remain fall.

Step by step solution

01

Step.1 Introduction

Those workers who do not have a job and eventually stop looking for one are referred to as discouraged workers. These workers are not included in the labor force.

02

Step.2 Explanation

If unemployed workers become discouraged, the measured percentage would decline. This is because discouraged workers are not counted in labor force or unemployed workers. So, the value of both will decline. As a result, unemployment rate, which is a ratio of the two will also fall.

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Most popular questions from this chapter

Are U.S. unemployment rates distributed evenly across the population?

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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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