Problems & Exercises for MACRO

UNIT TWO (FOR EXAM TWO)

Unit Two--Assignment Two--Web Problem 3

As noted in the reading assignment commentary, the labor force participation rate has increased in recent years. What effect does a higher participation rate have on the unemployment rate? That is, would the unemployment rate tend to rise, fall, or stay the same, and why? (Hint: compared to the first entrants into the labor force, is it harder or easier for the economy to provide jobs for the very last entrants into the work force?)

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