3. Discouraged workers and involuntary part-time workers Simply counting the number of unemployed workers will not necessarily give the Bureau of Labor Statistics (BLS) the most accurate indication of the extent of underemployment in the economy. Some parttime workers will be counted as employed even if they'd like to work fulltime. Furthermore, some jobless workers will not qualify as unemployed because they have given up on theirjob search, frustrated with their inability to nd work. Fortunately, the BLS can use the information provided in the household survey to classify workers in ways that account for these types of underemployment. The BLS classies those who work parttime because they cannot nd fulltime employment as involuntary part-time workers. The BLS classies as discouraged workers those who want and are available for work but have not searched for employment during the previous four weeks because they believe theirjob search is currently futile. By keeping track of discouraged and involuntary part-time workers, the BLS gets a clearer picture of underemployment than if it looked only at the number of unemployed workers. Which of the following statements correctly describe discouraged workers? Check all that apply. L] They are employed workers who want to earn higher wages. D They are available for work. D They are part-time workers who want to work full-time. D They have not looked for work during the past four weeks. Consider a hypothetical economy in which the labor force consists of 100 people. Of those, 95 people are employed full-time and 5 people are unemployed. The economy follows the same conventions as the U.S. Bureau of Labor Statistics (BLS) in computing its employment figures. Therefore, initially the unemployment rate is calculated as follows: Unemployment Rate = Number of Unemployed People x 100 Number of People in the Labor Force = 100 X 100 = 5% Suppose a reduction in foreign demand for this economy's products causes an economic recession-a prolonged period of declining output. The following table offers two possible scenarios resulting from the recession. Calculate the unemployment rate associated with each scenario in the following table. Assume that each scenario describes the only labor market changes in this economy. Scenario Unemployment Rate A: Firms reduce work hours by 20%. The number of involuntary part-time workers rises % as firms respond to the reduction in the demand for their products by reducing the hours of each employed person from 40 to 32 hours per week. B: Firms reduce employment by 20%. The number of unemployed workers rises as firms % respond to the reduction in the demand for their products by laying off 19 previously employed workers. True or False: The unemployment rate for scenario A in the previous table overstates the true extent of underemployment in the economy because the BLS counts part-time workers as employed. O True O False