Final answer:
Hidden unemployment is expected to be higher when the unemployment rate is high, as individuals may become discouraged and stop actively seeking employment, believing there are no suitable jobs available.
Step-by-step explanation:
When the unemployment rate is high, say 10%, you would generally expect hidden unemployment to be higher also. Hidden unemployment refers to individuals who are willing and capable of working but are not actively seeking employment because they believe no jobs are available for them or they are discouraged. When the unemployment rate is low, say 4%, the opportunity for employment is perceived to be higher, thus fewer individuals fall into the category of hidden unemployed. However, when the unemployment rate is high, there is a greater chance that individuals may stop actively looking for work due to discouragement about job prospects, leading to an increase in hidden unemployment.
When the overall unemployment rate is high, such as 10%, it is reasonable to anticipate that hidden unemployment is also elevated. Hidden unemployment involves individuals who possess the capability and willingness to work but are not actively seeking employment, often due to the belief that no suitable jobs are available or a sense of discouragement. In times of economic downturn and high unemployment, more people may withdraw from active job searches, contributing to the pool of hidden unemployment.
Conversely, during periods of low unemployment, around 4%, the perception of greater job opportunities reduces hidden unemployment. Individuals are more inclined to actively seek employment when the overall job market is favorable. The inverse relationship between the general unemployment rate and hidden unemployment underscores the psychological and behavioral factors influencing workforce participation based on perceived job prospects.