The labor force is 100 million and the unemployment rate is 5 percent.

The labor force is 100 million and the unemployment rate is 5 percent. One million people quit looking for a job. What is it called when an individual leaves the labor force, and in this case what is the new unemployment rate?

A) Encouraged worker, 5 percent.
B) Discouraged worker, 5.05 percent.
C) Discouraged worker, 3 percent.
D) Discouraged worker, 4.04 percent.

ANSWER

D