Alberto just received a promotion at work and now works 50 hours per week instead of 35 hours per week. As a result,

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Consider the scenario: Alberto was promoted and now works more hours per week, but he remains employed. The unemployment rate measures the share of the labor force that is unemployed, not the number of hours employed individuals work. Since Alberto was already counted as part of the employed, his shift from 35 to 50 hours does not change the number of unemployed people, nor the size of the labor force itself.

Option 1: 'neither the official unemployment rate nor the official labor force participation rate changed.' This is true because Alberto’s employment status did not move from employed to unemployed (or vice versa), and it did not remove or add him from the labor force. The unemployment rate would only change if the number of unemployed or the size of the labor force changed.

Option 2: 'the official unemployment rate increased.' This would require more people to be unemployed or the labor force to contract in a way that increases the ratio, neither of which occurs when a currently employed person simply adds hours.

Option 3: 'the official labor force participation rate increased.' Participation rate rises if more people join the labor force (or re-enter it) or if the size of the labor force grows while the population remains constant. Alberto remains in the labor force as employed; his hours change does not boost the participation rate.

Option 4: 'the official unemployment rate decreased.' A decrease would require fewer unemployed people or a larger labor force with the same unemployment count, which is not the case here since Alberto’s status is still employed.

W25 ECON D001 52Z Prin Macroeconomics FinalExamECON1

Alberto just received a promotion at work and now works 50 hours per week instead of 35 hours per week. As a result,

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