Unemployment Rate Calculation
If the number of unemployed workers remains constant while the labor force shrinks, what is the effect on the measured unemployment rate?
A
The unemployment rate increases because the ratio of unemployed to the smaller labor force rises.
B
There is no change in the unemployment rate since only the number of unemployed is considered.
C
It cannot be determined without knowing the total number of discouraged workers.
D
The unemployment rate decreases because fewer people are actively seeking employment.
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