If the number of unemployed increases by the same number as the number of people in the labor force, then:
A) the unemployment rate will decrease.
B) the population growth rate will increase.
C) the unemployment rate will increase.
D) the labor force participation rate will decrease.

Question

Quizplus · Accepted Answer

If the number of unemployed increases by the same number as the number of people in the labor force, then the unemployment rate will increase. This is because the formula for calculating the unemployment rate is the number of unemployed individuals divided by the labor force, so if both numbers increase by the same amount, the ratio remains the same but the overall number of unemployed individuals has increased. Population growth rate and labor force participation rate are not affected by this scenario.

If the Number of Unemployed Increases by the Same Number