Question

People who report not being in the labor force but who, in fact, want to work but have given up trying to find a job after an unsuccessful search cause the reported unemployment rate to be higher than otherwise.

True
False

Answer 1

False

Step-by-step explanation:

In order to be considered unemployed you must have been out of a job for more than 4 weeks, have been actively searching for one, and are available to work if you find a job.

This requirement of being willing to work means that not everyone able to work is considered unemployed. E.g. people studying at a university are not considered unemployed, or those who simply are not willing to work aren't considered unemployed.

In this case the labor force excludes all the people that do not have a job and are not actively looking for one, so they are not considered unemployed.

Answer 2

The answer is: False

Explanation:

The labour force consists of people who are employed and those who are unemployed. The unemployed consist of three groups: unemployed but actively searching for a job, unemployed and not actively look for a job, those who are able to work but have given up the search for employment. The official rate of unemployment measures the number of unemployed people in a country's labour force. In this case, people who have given up looking for jobs and are not reporting themselves as unemployed but rather as out of the labour force, make the unemployment rate lower. If they were counted as part of the unemployed, then the unemployment rate would be higher.