Entry into and exit from the labor force are important to the determination of the unemployment rate because:
A) more than one-half of the unemployed have only recently entered the labor force.
B) most of the unemployed are young workers still looking for their first job.
C) discouraged workers are counted as part of the labor force.
D) almost one-half of all spells of unemployment end in the unemployed person's withdrawal from the labor market.

Question

Quizplus · Accepted Answer

Almost one-half of all spells of unemployment end in the unemployed person's withdrawal from the labor market. This means that the rate of entry and exit from the labor force is an important factor in determining the unemployment rate. If more individuals are entering the labor force than exiting it, the unemployment rate may increase, and if more individuals are exiting the labor force than entering it, the unemployment rate may decrease. Therefore, understanding entry and exit from the labor force is crucial in determining the unemployment rate.

Entry into and Exit from the Labor Force Are Important