When the number of discouraged workers increases, the U3 unemployment rate will _____, giving a false impression that the economy is:

Question

Quizplus · Accepted Answer

When the number of discouraged workers increases, these individuals are no longer counted as part of the labor force, which can lead to a decrease in the U3 unemployment rate. This might give the false impression that the economy is healthier than it actually is, because the reduction in the unemployment rate is not due to more people finding jobs, but rather more people stopping their job search.

When the Number of Discouraged Workers Increases, the U3 Unemployment