kasinkei

5. "If the number of employed and the working age population remain the same, what are the effects of a decrease in the labour force on the unemployment rate and the labour force participation rate?"
a) both will increase
b) both will decrease
c) one will increase and one will decrease.

Answer: A.

But...
unemp rate: unemp/labour force. if labour force decreases, this ratio goes up.

LFPR: labour force/working age pop. if labour force decreases, this ratio goes DOWN.

What am I missing here?

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For 5 think the answer should be B

Since number of employed stay the same and labor force decreases, no of unemployed decrease too. hence unemp rate goes DOWN as well as LFPR