Question

If the number of employed workers in a country increases while its population does not change, then the unemployment rate in the country

• A. will always increase
• B. will always decrease
• C. may increase
• D. may decrease

Hint:

When population and labour force remain fixed, any increase in employment necessarily lowers the unemployment rate.

Answer 1

The Correct Option is B, D

Step 1: Recall the definition of unemployment rate.
\[ \text{Unemployment Rate} = \frac{\text{Number of Unemployed}}{\text{Labour Force}} \times 100. \] The labour force is the sum of employed and unemployed workers.
Step 2: Analyze the change.
If the total population (and hence the labour force) remains constant and the number of employed workers increases, it implies that the number of unemployed workers decreases.
Step 3: Conclusion.
Since unemployment decreases while total labour force is unchanged, the unemployment rate will always decrease.