Suppose That Some People Are Counted as Unemployed When, to Maintain

question 109

Multiple Choice

Suppose that some people are counted as unemployed when, to maintain unemployment compensation, they search for work only at places where they are unlikely to be hired. If these individuals were counted as out of the labour force instead of as unemployed, how would the labour statistics change?

• A) The unemployment rate and the labour-force participation rate would be higher.
• B) The unemployment rate and the labour-force participation rate would be lower.
• C) The unemployment rate would be lower, and the labour-force participation rate would be higher.
• D) The unemployment rate would be higher, and the labour-force participation rate would be lower.

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Definitions:

Neutral Third Party

An impartial entity involved in a dispute or negotiation to facilitate a resolution or agreement without any bias towards the parties involved.

Bargaining Zone

The range within which an agreement is satisfactory to both parties involved in a negotiation process.

Two-party Negotiation

A process where two parties discuss potential compromises to resolve a dispute or reach an agreement.

Non-rational Escalation

The phenomenon where individuals or groups continue to invest in a decision or project despite clear evidence it is not yielding beneficial outcomes, due to emotional investment or bias.