Question

Which of the following tends to occur when the unemployment rate increases? A. all of the above B. a reduction in the labor force participation rate C. none of the above D. an increase in the number of employed workers E. a reduction in the number of discouraged workers

Answer 1

Answer:

Option B, a reduction in the labor force participation rate

Explanation:

The labor force participation rate reduces when the rate of unemployment increases.

The labor force participation is a measure of the the active labor force in an economy. During unemployment, the number of active employees reduces and hence the rate of labor force participation also reduces.

Answer 2

Answer:

B. a reduction in the labor force participation rate

Explanation:

In the case when the rate of unemployment increased so there would be decrease in the labor force participation rate as the unemployment rate defines the percentage correspond with the labor force i.e. without the job or the labor force who has not in the job in the current period

hence, the correct option is B.