If the numbers of employed and unemployed do not change but the size of the civilian population increases by 15%, what would be the effect?
A)no change in the unemployment rate and a decrease in the labor force participation rate
B)an increase in the unemployment rate and a decrease in the labor force participation rate
C)an increase in the unemployment rate and no change in the labor force participation rate
D)an increase in the unemployment rate and an increase in the labor force participation rate

Question

If the numbers of employed and unemployed do not change but the size of the civilian population increases by 15%, what would be the effect?
A)​no change in the unemployment rate and a decrease in the labor force participation rate
B)​an increase in the unemployment rate and a decrease in the labor force participation rate
C)​an increase in the unemployment rate and no change in the labor force participation rate
D)​an increase in the unemployment rate and an increase in the labor force participation rate

Quizplus · Accepted Answer

If the numbers of employed and unemployed do not change, but the size of the civilian population increases, the labor force participation rate will decrease because a larger percentage of the population is not looking for work. However, the unemployment rate will not change because the number of unemployed individuals hasn't increased. Therefore, the correct answer is A - no change in the unemployment rate and a decrease in the labor force participation rate.

If the Numbers of Employed and Unemployed Do Not Change