Question

If the number of potential workers in an economy increases while the size of the labor force remains​ unchanged, ________. A. the natural rate of unemployment will increase B. the labor force participation rate will increase C. the labor force participation rate will fall D. the labor force participation rate will remain unaffected

Answer 1

Answer:

The answer here would be option C. from the answer list or options given in the question which is the labor force participation rate will fall.

Explanation:

• Labor force participation rate basically reflects the total or overall number of people who are actively participating the labor or work force in the economy and are actually qualified and eligible to be officially part of the work or labor force.
• Hence,even if the number of eligible and qualified people or workers in the economy potentially increases and the overall size of the work or labor force remains constant,it essentially implies that much of the eligible and qualified laborers or workers is either unemployed or has not been properly mobilized or utilized in the labor or work force in the economy.It can also indicate that majority of the people who are presently participating in the labor force are not eligible or fully qualified as per their occupational or professional designation.
• Therefore,in this instance the labor force participation rate will decline as the overall proportion of employment of the eligible and qualified laborers or workers does not really increase in the economy.Therefore,even if the number of potential workers or the labor resource increase in the economy,it has not been properly or completely utilized or employed in the overall labor force.