During a recession, people drop out of the labor force because they are unable to find a job. All else the same, this
A) increases the unemployment rate and the labor force participation rate.
B) increases the unemployment rate.
C) does not change the unemployment rate.
D) decreases the unemployment rate.

Question

Quizplus · Accepted Answer

When people drop out of the labor force, they are no longer counted as unemployed, which decreases the unemployment rate.

During a Recession, People Drop Out of the Labor Force