Because there is no way to account for them, the official unemployment rate does not include discouraged workers. What would happen to the unemployment rate if, because of a program that gave them new hope, all discouraged workers suddenly begin reporting themselves as ready to work?
A) The official unemployment rate would remain unchanged.
B) The size of the labor force would increase.
C) The size of the labor force would remain unchanged.
D) The official unemployment rate would decrease.
E) The size of the underground economy would shrink.

Question

Quizplus · Accepted Answer

The labor force is defined as those who are employed plus those who are unemployed but seeking work. If discouraged workers, who were previously not counted in the labor force because they were not actively seeking employment, suddenly begin to report themselves as ready to work, they would be classified as unemployed but seeking work. This would increase the size of the labor force because these individuals are now considered part of the pool of people either working or looking for work.

Because There Is No Way to Account for Them, the Official