Consider the following hypothetical data from the peaceable nation of Adirolf, w

Question

Consider the following hypothetical data from the peaceable nation of Adirolf, where there is no military, the entire population is over the age of 16, and no one is institutionalized for any reason. Then answer the questions. What is the unemployment rate in Adirolf? What is the labor force participation rate in Adirolf? For questions c through f: assume that 15 million Adirohian homemakers begin seeking jobs and that 10 million find jobs. Now what is the rate of unemployment in Adirolf? How does this change affect cyclical unemployment in Adirolf? What will happen to per capita GDP? Is the economy of Adirolf better off after the homemakers enter the labor force? Explain your response. In each of the following situations, determine whether or not the person would be considered unemployed. A 15-year-old offers to pot-sit, but no one hires her. A college graduate spends the summer after graduation touring Europe before starting a job search. A part-time teacher is only able to work two days a week, even though he would like a full-time job. An automobile worker becomes discouraged about the prospects for future employment and decides to quit looking for work.

Explanation / Answer

A) Labor force = employed + unemployed

Unemployment rate = unemployed / labor force = 9/150 = 0.06 = 6%

B) Labor force participation rate = labor force/ working age population = 150/200 = 0.75 = 75%

C) Unemployment rate = (9+5)/(150+15) = = .0848 = 8.48%

D) It will not cause change in cyclical unemployment rate in terms of percentage.

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