Suppose that unemployed workers searching to replace their lost jobs become discouraged and eventually decide to give up the search. Such a decision

Question

Quizplus · Accepted Answer

When unemployed workers give up the search, it no longer counts towards the official unemployment rate, therefore decreasing it. However, this does not affect the Non-Accelerating Inflation Rate of Unemployment (NAIRU), which represents the lowest level of unemployment that can be sustained without causing the inflation rate to rise.

Suppose That Unemployed Workers Searching to Replace Their Lost Jobs