Mike has just graduated from college and is now looking for a job, but has not yet found one. This causes the unemployment rate to ________ and the labor-force participation rate to ________.
A) increase; decrease
B) stay the same; stay the same
C) increase; increase
D) increase; stay the same

Question

Quizplus · Accepted Answer

Mike's job search increases the unemployment rate because he is actively looking for work but hasn't found a job yet. His participation also increases the labor-force participation rate because he is either working or looking for work, which are the criteria for being considered part of the labor force.

Mike Has Just Graduated from College and Is Now Looking