12. Assume we have an economy with 10 million Labor Force, 9 Million employed an

Question

12. Assume we have an economy with 10 million Labor Force, 9 Million employed and 10 million unemployed. a) What is the unemployment rate (in decimals out to 2 decimal places)? b) Now suppose 7200 of the employed lose their jobs and 9000 of the unemployed find jobs. What is the new unemployment rate (in decimals out to 3 decimal places)? c) No suppose starting with our original numbers for the employed, 8000 of the employed lose their job and 8000 of the unemployed find a job. What is the unemployment rate in this case (in decimals out to 3 decimal places)?

Explanation / Answer

Let N be total number of Labor Force. Let x be number of employed people. Let y be number of unemployed people.

a) The unemployment rate is given by : number of unemployed people / total number of labor force Now given y = 1 million and N = 10 million . Now putting those in formula we get desired results.

b) Here x changes to (x - 7200 + 9000) and y changes to ( y - 9000 + 7200 ) Again putting these in formula we get desired result

c) Here y changes to ( y - 8000 + 8000 ) = y . So there is no change in the unemployment rate

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.