Economics Q146

0. Assuming that the working-age population is constant, if the labor force participation ratio declines while the number of people employed remains unchanged, the unemployment rate will most likely:

  • Option : B
  • Explanation : For a given working-age population, a decline in the labor force participation rate, which is often the result of an increase in discouraged workers, reduces the labor force. If the number of people employed remain the same while the labor force is smaller, the number of workers defined to be unemployed must be smaller and the unemployment rate lower.
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