If the number of discouraged searchers increases, everything else remaining the same, then the
A)unemployment rate increases.
B)employment rate decreases.
C)labour force participation rate decreases.
D)labour force participation rate increases.
E)employment rate increases.

Question

Quizplus · Accepted Answer

Discouraged searchers are those who are available and willing to work but have given up actively seeking employment because they believe there are no job opportunities available for them. As a result, they are no longer considered as a part of the labour force. Therefore, if the number of discouraged searchers increases, the labour force participation rate decreases, as they are no longer counted as unemployed or part of the labour force. The unemployment rate and employment rate would remain the same, as they are calculated based on the number of employed and unemployed individuals who are actively seeking work.

If the Number of Discouraged Searchers Increases, Everything Else Remaining