CFA Level I · CFA Level I Exam · Understanding Business Cycles
A worker who has stopped searching for a job because she believes none are available, but who would accept one if offered, is most likely classified in official unemployment statistics as:
A discouraged worker who has stopped actively searching is classified as outside the labor force. Official unemployment requires active job search, so she is not counted as unemployed, which makes the headline unemployment rate lower than a broader measure would show.
- Aunemployed and in the labor force.
- Boutside the labor force.Correct
- Cemployed part time.
Explanation
To be counted as unemployed, a person must be actively searching for work. A discouraged worker has stopped searching, so she is classified as outside the labor force. The effect is that the measured unemployment rate is understated relative to a broader measure.
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