When the growth rate of the labor force is faster than the growth rate of the unemployed,the unemployment rate is falling.
This is because the denominator is growing faster than the numerator in the unemployment calculation.

Question

Quizplus · Accepted Answer

When the growth rate of the labor force is faster than the growth rate of the unemployed, the unemployment rate will fall because the denominator (labor force) is growing faster than the numerator (unemployed). This means that there are more employed people relative to the total labor force, which reduces the unemployment rate.

When the Growth Rate of the Labor Force Is Faster