Between September 2013 and September 2014 the number of discouraged workers decreased from 852,000 to 698,000. Assuming the change resulted from discouraged workers starting to make specific efforts to find a job again, this change creates
A) an increase to the U-3 unemployment rate.
B) a decrease to the U-3 unemployment rate.
C) no change to the U-3 unemployment rate.
D) a decrease in the labor force participation rate.

Question

Quizplus · Accepted Answer

When discouraged workers start looking for work again, they are counted as unemployed, which increases the U-3 unemployment rate because it measures the number of unemployed people as a percentage of the labor force, and these individuals re-enter the labor force when they begin searching for jobs.

Between September 2013 and September 2014 the Number of Discouraged