choices for a is 56 17.6 15 36 choices for b is 56 17 36 15 last one either over

Question

choices for a is
56
17.6
15
36

choices for b is
56
17
36

15

last one either overstated or understate

Consider a hypethetical economy in which the labor force consists of 100 people. of those, B5 people are employed fuil-time and 15 people are unemployed. The econamy follows the same conventions as the U.S. Bureau of Labor Statistics (BLS) in computing its employment figures. The unemployment rate is simply the number of unemployed people divided by the number af people in the labor force. Initially then, the unemployment rate is (15 / 100) x Suppose a reduction in foreign demand for this econamy's products causes an econornic recession-a prolonged period of declining output The table offers two different possible scenarias resulting from the recession. Calculate the unemployment rate associated with each scenario. Scenaric Forms reduce work hours by 25%. The number of involuntary part-time workers rises as firms respond to the reduction in the demand for their products by reducing the hours of each emplayed person from 40 to 30 hours per week Firms reduce employment by 25%. The number of unemployed workers rises as firms respond to the reduction in the demand for their previously employed workers. A. B. products by laying off 21 56.3% 17.6% 36.0% the true extent of underemployment in tl 15.0% The unemployment rate in scenario A because the BLS counts part-time workers as employed

Explanation / Answer

A) Unemployment is 36%,

Here already unemployed people ar 15%, Then you have this 85 people working an 25% of them are removed. So 85-25%=63.75 people now work there, So unemployment is 100-63.75 = 36.25

B) Firms reduce employment by 25%, then they fire 21 employed workers

85-25% = 63.75, Then 63.75-21 = 42.75, so 100-42.75 = 57.25 or close 56 is the option

Understated.

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