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Suppose that some previously discouraged workers start looking for work because they become more...

Question:

Suppose that some previously discouraged workers start looking for work because they become more optimistic about their prospects. The immediate effect of this is expected to be:

A. an increase in the unemployment rate.

B. a decrease in the unemployment rate.

C. an unchanged unemployment rate.

D. a reduction in the labor force participation rate.

Discouraged Workers:

Discouraged workers are workers who have given up searching for a job due to labor market conditions. They likely still want a job, but none exist, so they don't waste their time searching.

Answer and Explanation: 1

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  • The answer is A. an increase in the unemployment rate.

Discouraged workers looking for work again will initially increase the unemployment rate. This...

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Discouraged Worker: Definition & Effect

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Chapter 13 / Lesson 8
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Who are discouraged workers? Learn to define and differentiate discouraged workers from unemployed workers and find how this affects unemployment statistics.


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