If the number of officially employed and officially unemployed people do not change but the size of the population increases by 10%, there will be _____.
A)an increase in the unemployment rate and an increase in the labor force participation rate
B)an increase in the unemployment rate and no change in the labor force participation rate
C)a decrease in the unemployment rate and a decrease in the labor force participation rate
D)a decrease in the labor force participation rate with an increase in the unemployment rate
E)a decrease in the labor force participation rate but no change in the unemployment rate

Question

Quizplus · Accepted Answer

The labor force participation rate will decrease because the denominator (the total population) increases while the numerator (the sum of employed and unemployed) remains constant. The unemployment rate remains unchanged because both the numerator (the number of unemployed) and the denominator (the labor force) remain constant.

If the Number of Officially Employed and Officially Unemployed People