Scenario: Employment in Xenia
Xenia has 10 000 people.Of this population,1 000 residents are below age 15,and 2 000 have given up looking for work.Currently,500 people are unemployed but are actively looking for work;2 500 work part time,and the rest are fully employed.
Suppose some of those who had given up looking for work start looking again.The unemployment rate will:
A) increase.
B) decrease.
C) not be affected.
D) rise,fall,or stay the same.

Question

Quizplus · Accepted Answer

When people who had given up looking for work start looking again, they are counted as part of the labor force. This increases the number of unemployed people actively seeking work, thus increasing the unemployment rate.