By keeping track of discouraged workers and underemployed workers, the Bureau of
ID: 1160745 • Letter: B
Question
By keeping track of discouraged workers and underemployed workers, the Bureau of Labor Statistics (BLS) gets a clearer picture of the true employment situation than if it looked at only the number of unemployed workers. Which of the following statements correctly describe discouraged workers? Check all that apply They are available for work They are employed workers who want to earn higher wages They have not looked for work during the past four weeks They are part-time workers who want to work full-time Consider a hypothetical economy in which the labor force consists of 200 people. Of those, 160 people are employed full-time and 40 people are unemployed. The government of this economy follows the same conventions as the BLS in computing its employment figures. The unemployment rate is simply the number of unemployed people divided by the number of people in the labor force. Initially, then, the unemployment rate is (4O/200) x 100% 20.0% Suppose a reduction in foreign demand for this economy's products causes an economic recession-a prolonged period of declining output. The following table offers two different possible scenarios resulting from the recession Calculate the unemployment rate associated with each scenario Scenario Unemployment Rate Firms reduce work hours by 25%. The number of underemployed workers rises as firms respond to the reduction in the demand for their products by reducing the hours of each employed person from 40 to 30 hours per week Firms reduce employment by 25%. The number of unemployed workers rises as firms respond to the reduction in the demand for their products by laying off 40 previously employed workers A. B. The unemployment rate in scenario A because the BLS counts part-time workers as employed the true extent of underemployment in the economy,Explanation / Answer
1 C has a right. They have given up search for job
2 will not change as underemployed doesn't mean unemployed
3 40+40/200(100)=40%
4 is not (since it does not include underemployed )
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