Suppose there are 4 million people in an economy that are classified as unemployed.After a more thorough investigation,it becomes obvious that 200,000 of these people are actually phantom unemployed.As a result of this discovery,the unemployment rate will

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The unemployment rate is calculated as the number of unemployed individuals divided by the total labor force (employed and unemployed). If 200,000 of the initially classified unemployed are actually phantom unemployed (not really looking for work), then the total number of unemployed individuals in the economy is only 3.8 million. Dividing this number by the total labor force will result in a lower unemployment rate. Therefore, the unemployment rate will decrease.

Suppose There Are 4 Million People in an Economy That