The unemployment rate will decrease whenever there is a(n)_____.
A)increase in the number of persons classified as unemployed
B)decrease in the number of unemployed persons relative to the size of the labor force
C)decrease in the size of the population and no change in the number of persons classified as employed
D)reduction in the size of the labor force
E)decrease in the number of unemployed persons and no change the population

Question

Quizplus · Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed persons by the size of the labor force. So, when the number of unemployed persons decreases (while the size of the labor force remains constant), the unemployment rate will decrease as well. Option A is incorrect because an increase in the number of persons classified as unemployed would increase the unemployment rate. Option C is incorrect because a decrease in the size of the population does not necessarily affect the unemployment rate. Option D is incorrect because a reduction in the size of the labor force would decrease both the number of employed and unemployed persons, potentially leaving the unemployment rate unchanged. Option E is incorrect because it doesn't take into account the size of the labor force, which is necessary for calculating the unemployment rate.

The Unemployment Rate Will Decrease Whenever There Is A(n)_____