Transitions into and out of the labour force:
A) rarely occur.
B) do not affect unemployment statistics.
C) make unemployment statistics difficult to interpret.
D) reduce the amount of frictional unemployment.

Question

Quizplus · Accepted Answer

Transitions into and out of the labour force can make unemployment statistics difficult to interpret because someone who is not currently employed and not actively seeking work may not be counted as unemployed, even if they want to work. Similarly, someone who is temporarily laid off or seeking part-time work may be counted as employed, even if they are not fully employed. Thus, these transitions can cause fluctuations in unemployment statistics that do not necessarily reflect changes in the overall labour market.

Transitions into and Out of the Labour Force