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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

As the baby boom generation retires, the ratio of retirees to workers will increase noticeably. How will this affect the Social Security program? How will this affect the standard of living of the average American?

How do you calculate the unemployment rate? How do you calculate the labor force participation rate?

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

Are U.S. unemployment rates typically higher, lower, or about the same as unemployment rates in other high-income countries?

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