The unemployment rate will decrease when
A) the duration of unemployment increases.
B) the average workweek falls from 40 to 39 hours.
C) the age of the labor force increases.
D) people get discouraged and quit looking for work.

Question

Quizplus · Accepted Answer

When people get discouraged and quit looking for work, they are no longer counted as part of the labor force, which can lead to a decrease in the unemployment rate because the rate is calculated as the percentage of the labor force that is not employed but actively seeking employment.

The Unemployment Rate Will Decrease When