单选题

Holding the working-age population constant, if the labor force participation rate declines while the number of people employed remains unchanged, the unemployment rate will most likely:

【正确答案】 C
【答案解析】

For a given working-age population, a decline in the labor force participation rate (often caused by an increase in discouraged workers) reduces the labor force. If the number of people employed remains the same while the labor force becomes smaller, the number of workers defined to be unemployed must be smaller and thus the unemployment rate lower.