Suppose that next year 300 000 existing jobs in the economy are eliminated and 200 000 new jobs are created. The amount of unemployment will decline over that year if

Question

Quizplus · Accepted Answer

If more than 100,000 people drop out of the labor force, the net effect of losing 100,000 jobs (300,000 eliminated minus 200,000 created) will be offset by the reduction in the labor force, leading to a decline in unemployment.

Suppose That Next Year 300 000 Existing Jobs in the Economy