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