Suppose that there are 1 million unemployed workers seeking jobs.After a period of time,100,000 of them become discouraged over their job prospects and cease looking for work.As a result,the official unemployment rate would:
A)increase in the short run, but eventually decrease
B)increase
C)decrease
D)remain unchanged
E)remain unchanged in the short run, but eventually decrease

Question

Quizplus · Accepted Answer

The official unemployment rate would decrease because it is calculated based on the number of people actively looking for work. When 100,000 workers stop looking for work, they are no longer counted as part of the labor force, which reduces the unemployment rate.

Suppose That There Are 1 Million Unemployed Workers Seeking Jobs