Question

Suppose the number of people who retire is greater than the number of people who enter the workforce and find jobs. Holding all else the same, the labor force participation rate will ________ and the unemployment rate will ________. (A) increase; increase (B) increase; decrease (C) decrease; not change (D) decrease; increase (E) decrease; decreas

Answer 1

(E) decrease; decrease

Step-by-step explanation:

Number of people who retire is greater than the number of people who enter the workforce and find jobs = less working-age population = decreace labor force participation rate

The absorption of the available labor force will lead to the consequent decrease in the unemployment rate.