Matt loses his job and decides to sit on the beach rather than looking for work the next few months.Other things the same,the unemployment rate

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Matt's decision to sit on the beach instead of looking for work is considered as 'voluntarily unemployed'. Since he is not actively looking for work, he is not counted as part of the labor force. However, he is still considered as unemployed. Therefore, the unemployment rate increases. On the other hand, the labor-force participation rate decreases because Matt is not counted as part of the labor force.

Matt Loses His Job and Decides to Sit on the Beach