Final answer:
A high-school graduate who stops looking for full-time work is considered 'discouraged' and categorized as 'not in the labor force'. Such individuals are not included in unemployment statistics. Subsistence households may also be counted as not working, while recent college graduates in search are classified as frictionally unemployed.
Step-by-step explanation:
The situation described, where a high-school graduate has given up looking for full-time work and is therefore not counted as looking for employment, is an example of someone who has become discouraged and is no longer in the labor force. This individual has moved from what would be considered the 'unemployed' category to 'not in the labor force' because they are no longer actively seeking employment. When workers stop looking for jobs due to discouragement over their job prospects, they are no longer included in the unemployment statistics, which can give a skewed representation of the actual employment situation.
Moreover, subsistence households may be counted as not working, which also affects the recorded unemployment rates. The government categorizes individuals seeking a job after graduating college as frictional unemployed, while those like the individual in our scenario are not part of the labor force at all.