Question

Mike has just graduated from college and is now looking for a​ job, but has not yet found one. This causes the unemployment rate to​ ________ and the laborminusforce participation rate to​ ________. A. ​Increase; increase B. Stay the​ same; stay the same C. ​Increase; decrease D. ​Increase; stay the same

Answer 1

Answer: A. ​Increase; increase

Explanation:

Unemployment rate is the percentage of the labor force that are able to work and are seeking employment but are not currently employed. It is calculated by  $\frac{unemployed people}{labor force}$ X 100.

Mike joining the labor force and being currently unemployed increases this rate.

The labor force participation is the percentage of the a country's working age population who are looking for work or already employed. It is calculated by $\frac{unemployed + employed people}{Working age population}$.

This number will also increase because of Mike's addition to the number of unemployed people but not the working age population.