You hear one politician who is currently in office promote that “the overall une

Question

You hear one politician who is currently in office promote that “the overall unemployment rate is declining due to my effective economic decisions. Vote for me again to continue this trend!” You think about the working-age adults in your town who you know and conclude that a good number of them are jobless, although they are willing and able to work. As an economics student, you jump to analyze this situation with your macroeconomic knowledge. Why might the overall unemployment rate decline while a number of workers remain jobless? Explain and be sure to include the appropriate types of unemployment in your response.

Explanation / Answer

This is the greatest trick available with politicians and government planners who say unemployment numbers have decreased,

The reality is that key economic indicators are still very weak, The unemployment rate looks lower today than before just because of 2 reasons

1. The number of people looking for work decreased as they found no job from official unemoployment agencies they just stopped looking for work

2. Most people work partime now for little wages, This is actually unemployment but government considers this as employment

3. The other reason for decline in the unemployment is due to unemployment agencies dropping people from their list.

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