The Labor Force Participation Rate

question 56

Multiple Choice

The labor force participation rate

• A) has an inverse effect of the supply of labor.
• B) increases as the real wage rate increases.
• C) does not change when the real wage rate changes.
• D) decreases as the real wage rate rises.

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Definitions:

Normative Statements

Assertions about how the world ought to be, involving opinions and subjective judgements.

Rational Choice

A theory assuming individuals use logical calculations to make prudent decisions that provide them with the greatest benefit or satisfaction.

Facts

Data or information based on real occurrences or truths used for analysis, decision-making, or proving arguments.

Theories

Systematic ideas or principles formulated to explain phenomena, provide understanding, and predict future occurrences.