If the numbers of employed and unemployed do not change but the size of the population increases by 10%,what would be the effect?
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) an increase in the unemployment rate and a decrease in the labor force participation rate
D) no change in the unemployment rate and a decrease in the labor force participation rate

Question

Quizplus · Accepted Answer

The unemployment rate remains unchanged because both the number of employed and unemployed do not change. However, the labor force participation rate decreases because the population increases while the labor force size remains the same.

If the Numbers of Employed and Unemployed Do Not Change