Suppose that roughly 8 million people in Canada unsuccessfully sought work this month, the same number as last month, while 2 million people who were unemployed last month gave up searching for work this month. What will happen to the official unemployment rate this month, all other things equal? a. The unemployment rate will decrease by 25%. b. It will fall because 2 million people are no longer in the labour force and so are not counted as unemployed. c. It will rise because 2 million people are no longer in the labour force and so are not counted as unemployed. d. It will be unaffected because the same number of people are unemployed.
Suppose that roughly 8 million people in Canada unsuccessfully sought work this month, the same number as last month, while 2 million people who were unemployed last month gave up searching for work this month. What will happen to the official unemployment rate this month, all other things equal? a. The unemployment rate will decrease by 25%. b. It will fall because 2 million people are no longer in the labour force and so are not counted as unemployed. c. It will rise because 2 million people are no longer in the labour force and so are not counted as unemployed. d. It will be unaffected because the same number of people are unemployed.
Chapter7: Unemployment And Inflation
Section: Chapter Questions
Problem 16E
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Suppose that roughly 8 million people in Canada unsuccessfully sought work this month, the same number as last month, while 2 million people who were unemployed last month gave up searching for work this month. What will happen to the official
unemployment rate this month, all other things equal?a. The unemployment rate will decrease by 25%.
b. It will fall because 2 million people are no longer in the labour force and so are not counted as unemployed.
c. It will rise because 2 million people are no longer in the labour force and so are not counted as unemployed.
d. It will be unaffected because the same number of people are unemployed.
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