Final answer:
The official unemployment rate can be determined by dividing the number of unemployed people by the total labor force. Reclassifying unemployed workers as discouraged can decrease the unemployment rate, while adding retired people as job seekers can increase the unemployment rate.
Step-by-step explanation:
The official unemployment rate of an economy can be determined by dividing the number of unemployed persons by the number of persons in the labor force and multiplying by 100. In this case, the number of unemployed people is 7.635 million and the total labor force is 157 million. Dividing 7.635 million by 157 million gives a result of 0.0487. Multiplying by 100, the official unemployment rate is 4.87%.
If 100 of the unemployed job seekers became classified as discouraged workers, they would be excluded from the official unemployment rate calculation. The resulting unemployment rate would be lower because the number of unemployed people would decrease while the labor force remains the same. However, the specific calculation would depend on the total number of discouraged workers and the size of the labor force.
If 100 retired people decided to become job seekers due to high equilibrium wages, they would be included in the labor force. The resulting unemployment rate would increase because the number of unemployed people would increase while the labor force also increases. Again, the specific calculation would depend on the total number of retired people and the size of the labor force.