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True or False. If the Employed Persons Figure increases, the unemployment rate must decrease. [2 marks]...

True or False. If the Employed Persons Figure increases, the unemployment rate must decrease. [2 marks]

I think it is false as if the number of people that are previously employed leaving the labour force is greater than the increased number of employed people, then would cause an increase in unemployment rate

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Answer #1

The unemployment rate is the proportion of the labor force that is not currently employed.

We cannot conclude that unemployment rate has come down by just looking at the sheer number of employment rate.That is because if the increase in unemployed workforce in percentage terms is higher than the increase in employment the unemployment rate will increase.This is possible due to addition of new workforce in the economy and/or withdrawal of existing workforce.Hence,the statement cannot be true always.  

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