If the number employed increases while the number unemployed does not change, the unemployment rate:
A)will increase.
B)will decrease.
C)will not change.
D)may either increase or decrease.

Question

Quizplus · Accepted Answer

The unemployment rate is calculated as the number of unemployed individuals divided by the total labor force (employed and unemployed). If the number of employed individuals increases without a change in the number of unemployed individuals, the total labor force also increases. This means that the denominator of the unemployment rate calculation increases, while the numerator remains constant. Therefore, the unemployment rate will decrease.

If the Number Employed Increases While the Number Unemployed Does