Question

An individual who is not working and not actively looking for employment because he is discouraged by the lack of available jobs is not counted as part of the labor force. Why can this impact the unemployment rate?

Answer 1

Answer:

They do not impact the unemployment rate

Explanation:

Such an Individual is called discouraged worker.

Thee rate of unemployment is officially defined as the unemployed worker as a percentage of labor force. The discouraged workers are not actively looking for a job. And therefore, they are not considered as a participants in labor market. They are neither considered unemployed  nor a part of labor force. Hence, they do not  impact the unemployment rate