If the unemployment rate falls because the number of people not working but searching for work falls, economists would attribute this to the
A. encouraged worker effect.
B. fallacy of composition.
C. discouraged worker effect.
D. none of the above
Answer: C
You might also like to view...
Assume goods X and Y are complements and are produced in perfectly competitive markets. All else constant, an increase in demand for good X would cause:
A) a decrease in the number of firms that produce good X. B) an increase in the number of firms that produce good Y. C) a decrease in the number of firms that produce good Y. D) no effect on the number of firms that produce either good.
If a corporation fails, the last recipients of funds that may remain are
A) preferred stockholders. B) common stockholders. C) bond holders. D) government tax collectors.
Economists who support minimum-wage legislation are likely to believe that the
a. demand for unskilled labor is relatively inelastic. b. demand for unskilled labor is relatively elastic. c. supply of unskilled labor is relatively elastic. d. supply of unskilled labor is relatively inelastic.
According to Okun's law, when the output gap is positive, cyclical unemployment:
A. equals frictional unemployment. B. equals structural unemployment. C. equals zero. D. is negative.