All else equal, if unemployment falls by 2 percentage points to 6 percent, this indicates that:

Question

Quizplus · Accepted Answer

A decrease in the unemployment rate indicates that a higher proportion of the labor force is employed, not that people have lost jobs. Therefore, if unemployment falls by 2 percentage points to 6 percent, it means that more people who were previously unemployed have found jobs. The correct interpretation is that 20 out of every 1,000 unemployed individuals found a job, assuming the percentage points are directly translated to the number of people in a hypothetical labor force of 1,000.

All Else Equal, If Unemployment Falls by 2 Percentage Points