Question

Unemployment/Inflation Prac

Consider the following population statistics from a country's economy. Assume people CANNOT fit into two different
categories at the same time:
Category
Under 16 years old
Stay at home parents
Part-Time Workers
Full-Time Workers
Discouraged Workers
Military Personnel
Unemployed job seekers
Population
1,000
100
800
1,000
100
200
200
500
Retired
a. Using the above information determine the official unemployment rate of this economy
b. Assume that 100 of the unemployed job seekers became defined as discouraged- what would be the resulting
unemployment rate?
C.
Assume instead that 100 retired people decided to become job seekers due to high equilibrium wages- what
would be the resulting unemployment rate?

Answer 1

The official unemployment rate is 9.09%. If 100 unemployed job seekers become discouraged workers, the unemployment rate decreases to 4.54%. If 100 retired people become job seekers, the unemployment rate increases to 13.04%.

option a is the correct

Step-by-step explanation:

The official unemployment rate is calculated by dividing the number of unemployed individuals by the number of individuals in the labor force. In this case, the number of unemployed job seekers is 200, and the number of individuals in the labor force is the sum of part-time workers (800), full-time workers (1,000), unemployed job seekers (200), and military personnel (200), which totals to 2,200. Dividing 200 by 2,200 gives an unemployment rate of approximately 9.09%.

If 100 unemployed job seekers are now defined as discouraged workers, the number of unemployed individuals decreases to 100. The labor force remains the same at 2,200. Dividing 100 by 2,200 gives an unemployment rate of approximately 4.54%.

If 100 retired people become job seekers, the number of unemployed individuals increases to 300. The labor force increases to 2,300 (by adding the 100 retired people to the previous labor force). Dividing 300 by 2,300 gives an unemployment rate of approximately 13.04%.