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 in the population.

Question

Quizplus · Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed individuals by the total labor force (employed + unemployed individuals). Therefore, a decrease in the number of unemployed individuals relative to the size of the labor force will result in a lower unemployment rate. This can occur through job creation, individuals leaving the labor force, or a combination of both. Choices A, C, D, and E would not result in a decrease in the unemployment rate.

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