Including discouraged workers in the calculation of the unemployment rate would
A) lower the reported rate.
B) change the reported rate, but in an unpredictable manner.
C) increase the reported rate.
D) not change the reported rate.

Question

Quizplus · Accepted Answer

Including discouraged workers in the calculation of the unemployment rate would increase the reported rate. This is because discouraged workers are individuals who have given up on the job search and are not actively seeking employment, but they still want a job. When they are included, it increases the pool of individuals who want to work but are unable to find employment, hence increasing the reported rate.

Including Discouraged Workers in the Calculation of the Unemployment Rate