Question

Matilda just graduated from college. In order to devote all her efforts to college, she did not hold a job. She is going to cruise around the country on her motorcycle for a month before she starts looking for work. Other things the same, the unemployment rate ____________ and the labor force participation rate ______________.

		A.  increases; does not change.
		B.  does not change; decreases.
		C.  decreases; does not change.
		D.  increases; decreases.
		E.  increases; increases.
		F.  does not change; increases.
		G.  does not change; does not change,
		H.  decreases; increases.
		I.  decreases; decreases.

Answer 1

Answer
Option G
does not change; does not change
Unemployed is a one who is actively looking for a job and employed is a one who is working as part or full time but Matilda is not looking or job or having any job right now so it will not change employed or unemployed
Labor force =employed +unemployed

Unemployment rate =(unemployed/labor force)*100
the labor force participation rate=(labor force/working-age population)
so there is no effect on both the rates.