Question

Following table shows employment data for an economy. Use the table to answer questions 98 and 99.

Population (Civilian, non-institutional) 520,000
Civilian Labor Force 364,000
Not In Labor Force 156,000
Employed 338,500

Now suppose 4,000 of the people looking for work get discouraged and give up their job searches. The unemployment rate becomes _____.

a. 6.35%
b. 5.97%
c. 5.91%
d. 2.92%

Answer 1

c. 5.91%

Step-by-step explanation:

The Number of unemployed = Civilian Labor force - No of employed

The Number of unemployed = 364,000 - 338,500

The Number of unemployed = 25,500

Unemployment rate = (No of unemployed/Labor force)*100

Unemployment rate = (25500/364000)*100

Unemployment rate = 7.01%

The New number of unemployed after 4,000 of the people looking for work get discouraged and give up their job searches = 25,500 - 4,000 = 21,500

So, the new unemployment rate = (21500/364000)*100

= 5.91%