Due to the Added Worker Effect, the Labor Force Participation

question 6

Multiple Choice

Due to the added worker effect, the labor force participation rate

• A) increases during a recession.
• B) decreases during a recession.
• C) is a fairly useless statistic.
• D) overcounts the number of workers wanting a job.
• E) overcounts the number of workers with a job.

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Definitions:

Future Value

The value of an investment or a sum of money projected at a future date, calculated by applying interest or growth rates to the present value.

Time Value

The theory that a sum of money is more valuable if it's available immediately, rather than the same amount in the future, because of its earning capabilities.

Interest Rate

The percentage of a loan amount charged by the lender to the borrower for the use of money, typically expressed on an annual basis.

Present Values

This concept calculates the current worth of a future sum of money or stream of cash flows given a specified rate of return.