The unemployment rate is one measure of the economic health of our nation. Explain how the existence of discouraged workers and underemployed workers may undermine the usefulness of the unemployment rate for this purpose

The number of discouraged workers will tend to increase in an economic downturn. This increase will lead to a
decrease in the unemployment rate, since these workers will no longer be counted as unemployed members of the
labor force. Similarly, the number of underemployed workers will tend to increase in an economic downturn. This
leaves people worse off, but does not register as an increase in the unemployment rate. For these reasons, the
unemployment rate does not fully measure the state of the economy's economic health.