Question

13) Consider the following information for a particular economy. Total population = 60 million Number of employed 30 million Total labour force = 40 million Natural rate of unemployment = 12% a) Find the total unemployment rate b) Calculate the cyclical unemployment rate​

Answer 1

Step-by-step explanation:

a) Find the total unemployment rate

Total labour force = 40 million

Number of employed = 30 million

Number of unemployed = 40 - 30 = 10 million

Unemployment rate = (unemployed / Labour force) × 100

Unemployment rate = (10 million / 40 million) × 100 = 25%

b) Calculate the cyclical unemployment rate​

Cyclical unemployment rate = Unemployment rate - natural rate of unemployment

Unemployment rate = 25%

Natural rate of unemployment = 12%

Cyclical unemployment rate = 25 - 12 = 13%