Suppose there are 4 million people in an economy that are classified as unemployed. After a more thorough investigation, it becomes obvious that 200,000 of these people are actually phantom unemployed. As a result of this discovery, the unemployment rate will
A. Remain unchanged until the unemployed find a job.
B. Decrease.
C. Increase initially but decrease when the phantom unemployed receive unemployment benefits.
D. Increase.
Answer: B
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The price of a financial asset equals the
A) future value of all payments B) sum of all payments C) present value of all future payments D) difference between the future value and present value of all payments
The classical economists believed that
a. labor supply is upward sloping because the income effect is greater than the substitution effect. b. labor supply is upward sloping because the substitution effect is greater than the income effect. c. labor supply is downward sloping because the income effect is greater than the substitution effect. d. in equilibrium, the marginal product of labor must exceed the real wage. e. both b and d.