Some Persons Are Counted as Out of the Labor Force

question 121

Multiple Choice

Some persons are counted as out of the labor force because they have made no serious or recent effort to look for work.However,some of these individuals may want to work even though they are too discouraged to make a serious effort to look for work.If these individuals were counted as unemployed instead of out of the labor force,then

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

---

Definitions:

Security Market Line

A line that depicts the relationship between the expected return of a market security and its risk as measured by beta.

Risk-Free Rate

The theoretical return on an investment with zero risk, serving as a benchmark for evaluating other investments.

Market Rate

The typical or prevailing price level for goods or services in a competitive market, or the interest rate available for loans and deposits in the financial market.

Portfolio Beta

A measure that reflects the sensitivity of a portfolio's returns to movements in the market returns, representing the portfolio's systematic risk.