Question

6.1: If Unemployment Rate is decreasing and on the same time the Labor Force Participation Rate is decreasing too. Is this good news for the economy? Why? Why not?

Answer 1

This is not the good news, because declining Labor Force Participation Rate means there are less persons in the official workforce which can indicate there are many discouraged workers who have stopped looking for job which is far way negative than the increase in unemployment rate. In addition, the unemployment rate might have decline due to decline in Labor Force Participation Rate because unemployed workers are out of workforce because they are not finding jobs , so this may reflect the wrong picture. Overall Labor force participation decline is negative for economy like US.

the above is answer..