Classifying discouraged workers as unemployed would ?
Correct answer: C. increase the unemployment rate
- A. not change the unemployment rate
- B. decrease the unemployment rate
- C. increase the unemployment rate
- D. have an indeterminate impact on the unemployment rate
Explanation
Discouraged workers are normally outside the labour force, so counting them as unemployed adds them to both unemployment and the labour force. Since the unemployment rate is normally below 100 percent, this raises the measured rate.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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