Which of the following statements about discouraged workers is correct?
A) Because of the existence of discouraged workers, the reported unemployment rate generally understates the true level of unemployment in an economy.
B) The unemployment rate rises when those no longer looking for work are no longer counted as unemployed.
C) People who are still looking for work and have been unemployed for longer than four weeks are classified as having dropped out of the labor force rather than as being unemployed.
D) None of the above statements is correct.

Question

Quizplus · Accepted Answer

Discouraged workers are individuals who have given up looking for work and are no longer counted as unemployed. Because they are not counted as unemployed, the reported unemployment rate may be lower than the true level of unemployment in the economy.

Which of the Following Statements About Discouraged Workers Is Correct