When You Include Discouraged Workers and Unemployed Workers in Calculations

question 130

Multiple Choice

When you include discouraged workers and unemployed workers in calculations of the unemployment rate

• A) the difference between this alternate measure and the official unemployment rate increases significantly during recessions.
• B) the difference between this alternate measure and the official unemployment rate increases significantly during economic expansions.
• C) this alternate measure is much lower than the official unemployment rate.
• D) this alternate measure is the same as the official unemployment rate.
• E) this alternate measure is not useful in studying the macroeconomy.

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Definitions:

Allocative Efficiency

A state of the economy in which production represents consumer preferences; in other words, when capital goods are distributed in the most beneficial manner among the population.

Production Possibilities Curve

A graphical representation that shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized.

Competitive Markets

Markets where numerous producers and consumers interact, leading to efficient distribution of goods and services and price determination through supply and demand.

Supply and Demand

A fundamental economic model that describes how prices and quantity of goods and services are determined in a market.