Answer:
a). Labor force=112,000
b). The unemployment rate=10.71%
c). Natural rate of unemployment=8.04%
d). d). The economy is in an expansion since the existence of a natural rate of unemployment implies that the economy is growing and healthy
Step-by-step explanation:
a). The size of the labor force can be calculated using the formula below;
Labor force=Total number of employed+total number of unemployed
where;
Total number o employed persons=100,000
total number of unemployed=12,000
replacing;
Labor force=(100,000+12,000)=112,000
b). The unemployment rate can be calculated as;
Unemployment rate=(number of unemployed persons/labor force)×100
where;
number of unemployed persons=12,000
labor force=112,000
replacing;
Unemployment rate=(12,000/112,000)×100=10.71%
The unemployment rate=10.71%
c). The natural rate of unemployment can be expressed using the formula below;
Natural rate of unemployment=(Frictionally unemployed+structurally unemployed)/labor force×100
where;
Frictionally unemployed=7,000
structurally unemployed=2,000
labor force=112,000
replacing;
Natural rate of unemployment={(7,000+2,000)/112,000}
Natural rate of unemployment=8.04%
d). The economy is in an expansion since the existence of a natural rate of unemployment implies that the economy is growing and healthy