ECONOMICS
BUSINESS CYCLES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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More workers than 100, 000 become discouraged
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More than 100, 000 workers go from being discouraged to actively looking.
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More than 100, 000 workers leave the Labor Force
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None of the above
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Detailed explanation-1: -Even though they would like a job, discouraged workers are not counted as unemployed or included in the unemployment rate. They are counted in the real unemployment rate. Discouraged workers moving in and out of the labor force can affect how the unemployment rate is measured in the official unemployment rate.
Detailed explanation-2: -A high unemployment rate affects the economy in many ways. Unemployed people tend to spend less, may accrue more debt, and unemployment may lead to higher payments from state and federal governments for things like food stamps.
Detailed explanation-3: -When workers become discouraged and stop looking for employment, they leave the labor force. It is common in economic downturns for the labor force to decrease (or increase more slowly than usual) in size as many give up on finding work and are therefore no longer counted as officially unemployed.
Detailed explanation-4: -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.