How Would the Unemployment Rate and the Labor Force Participation

question 203

Essay

How would the unemployment rate and the labor force participation rate change if discouraged workers were counted as unemployed rather than counted as not in the labor force? Show using the formula for both measurements.

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Definitions:

Consumer Surplus

The difference between the maximum amount that consumers are willing to pay for a good or service and the amount they actually pay.

Consumer Surplus

The benefit obtained by consumers because they are able to purchase a product for a price that is less than the maximum price that they are willing to pay.

Equilibrium Price

The rate at which the amount of products offered matches the amount of products consumers want.

Unregulated Market

A market where the government does not impose price controls, quotas, or other restrictions on the forces of supply and demand.