Question

Suppose the working-age population of a fictional economy falls into the following categories:

75 have full-time employment; 25 have part-time employment; 20 do not have employment, but are actively looking for employment; and 10 people are stay at home parents.
(1) What is the size of Labor force?
(2) What is the Unemployment rate?

Answer 1

The right solution is:

(a) 120

(b) 20%

Step-by-step explanation:

Given that,

Full time employed,

= 75

Part time employed,

= 25

Total unemployed,

= 20

(a)

The total employed will be:

=
`Full \ time + Part \ time`

=
`75+25`

=
`100`

Now,

Labor force will be:

=
`Total \ employed+Total \ unemployed`

=
`100+20`

=
`120`

(b)

The unemployment rate will be:

=
`(Total \ unemployment)/(Labor \ force)* 100`

=
`(20)/(100)* 100`

=
`0.2* 100`

=
`20` (%)