Suppose an economy has 10,000 people who are not working but looking and available for work...

Suppose an economy has 10,000 people who are not working but looking and available for work and 90,000 people who are working. What is its unemployment rate?

Now suppose 4,000 of the people looking for work get discouraged and give up their searches. What happens to the unemployment rate? Would you interpret this as good news for the economy or bad news? Explain.

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Expert Solution

Rahul Sunny answered 1 year ago

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