Suppose the number of people who retire is greater than the number of people who enter the workforce and find jobs.All else the same,the labor force participation rate will ________ and the unemployment rate will ________.
A) decrease; increase
B) decrease; decrease
C) increase; increase
D) decrease; not change
E) increase; decrease

Question

Quizplus · Accepted Answer

If the number of people who retire is greater than the number of people who enter the workforce and find jobs, then the overall size of the labor force will decrease. This means that the labor force participation rate will also decrease as a percentage of the total population. At the same time, the number of unemployed individuals will increase (since there are fewer jobs available relative to the number of people seeking employment), causing the unemployment rate to increase. Therefore, A) decrease; increase is the correct answer.

Suppose the Number of People Who Retire Is Greater Than