1.(a) Show how the adult population (age 15 and over) can be divided into four different groups in a diagram according to age and labour market characteristics.

(b)Define labour force and unemployment rate based on the groups defined in part (a).

(c)Use numerical examples to demonstrate how the discouraged worker effect and the added worker effect influence the unemployment rate such that it may not accurately reflect job market conditions.

(d)Explain why life is harsh when employment rate and unemployment rate add up to 100%.

(e)Discuss two major events that influence not only the female labour force participation rate, but also the male labour force participation rate.