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If a sizable number of workers were switched from full-time to half-time employment, then the...

Question:

If a sizable number of workers were switched from full-time to half-time employment, then the official unemployment rate would:

a. rise

b. fall

c. remain unchanged

d. react unpredictably

Unemployment Rate:

The unemployment rate is an example of a lagging indicator since it tends to follow real GDP growth rates but on a lag. This happens because the demand for labor is derived from the demand for goods and producers will adjust down their demand for labor as the economy worsens.

Answer and Explanation: 1

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Answer: c

The official unemployment rate is the U-3 unemployment rate which treats both full-time and half-time workers in the same way. They are...

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Why the Unemployment Rate Decreases and Increases

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Chapter 6 / Lesson 2
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Unemployment rates are an important indicator of the economy. This lesson will explore what defines unemployment, why unemployment rates change, the way unemployment is calculated, and look at the three types of unemployment.


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