When you include discouraged workers and unemployed workers in calculations of the unemployment rate
A) the difference between this alternate measure and the official unemployment rate increases significantly during recessions.
B) the difference between this alternate measure and the official unemployment rate increases significantly during economic expansions.
C) this alternate measure is much lower than the official unemployment rate.
D) this alternate measure is the same as the official unemployment rate.
E) this alternate measure is not useful in studying the macroeconomy.

Question

Quizplus · Accepted Answer

When discouraged workers and unemployed workers are included in the unemployment rate calculations, it is called the U-6 measure of unemployment. The U-6 measure typically increases significantly during recessions as more individuals become discouraged and drop out of the labor force, which causes the difference between the U-6 measure and the official unemployment rate to increase.

When You Include Discouraged Workers and Unemployed Workers in Calculations