Question

1. David celebrates his 16th birthday and starts looking for a job. The unemployment rate will __?__ and the labor force participation rate will __?__. Enter increase, decrease, or same (to indicate no change).

2. Ben, a stay­at­home dad, starts looking for a job when his child enters elementary school. The unemployment rate will __?__and the labor force participation rate will __?__. Enter increase, decrease, or same (to indicate no change).

Answer 1

Ans)

1.

increase; increase

Since David is 16 years of age he is a part of the adult population,he is also looking for work but does not have a job and he is hence a part of the labor force.Labor force is the sum of employed and unemployed people. Since Labor force participation rate is calculated as Labor Force/Adult population the Labor force participation rate increases

2.

increase; increase

Ben, earlier when he chose not to work was not a part of the labor force but when his kid entered elementary school chose to work.He thus became a part of the labor force.Since he is still looking for work he is unemployed.