Suppose that the LFS data show the number of employed has decreased by 2,000. Then you know with certainty that: a. Exactly 2,000 people previously employed lost a job. b. The participation rate has not changed. c. The unemployment rate has increased. d. The size of the labour force has decreased. e. None of the above. Hint: remember that the LFS is a snapshot in time, i.e. it shows the number of people in each category at a certain date, but it does not show flows of people from one category to another during a certain period. Also, the ‘with certainty’ bit in any question is important, the answers may be different from the case of ‘likely’ or ‘possibly’.
MULTIPLE CHOICE (identify the one best answer below and provide a justification for each of the five options):
Suppose that the LFS data show the number of employed has decreased by 2,000. Then you know with certainty
that:
a. Exactly 2,000 people previously employed lost a job.
b. The participation rate has not changed.
c. The
d. The size of the labour force has decreased.
e. None of the above.
Hint: remember that the LFS is a snapshot in time, i.e. it shows the number of people in each category at a certain
date, but it does not show flows of people from one category to another during a certain period. Also, the ‘with
certainty’ bit in any question is important, the answers may be different from the case of ‘likely’ or ‘possibly’.
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