If the numbers of people officially employed and officially unemployed each increased by 10%, while the non-institutional population increased by 15%, 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 a decrease in the labor force participation rate
C)No change in the unemployment rate and an increase in the labor force participation rate
D)No change in the unemployment rate and a decrease in the labor force participation rate

Question

If the numbers of people officially employed and officially unemployed each increased by 10%, while the non-institutional population increased by 15%, 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 a decrease in the labor force participation rate
C)​No change in the unemployment rate and an increase in the labor force participation rate
D)​No change in the unemployment rate and a decrease in the labor force participation rate

Quizplus · Accepted Answer

The unemployment rate remains unchanged because both employed and unemployed numbers increase by the same percentage. However, the labor force participation rate decreases because the non-institutional population grows at a higher rate than the labor force.

If the Numbers of People Officially Employed and Officially Unemployed