Need help understanding and answering these questions. Thanks 8. Suppose that so

Question

Need help understanding and answering these questions. Thanks

8. Suppose that some country had an adult population of about 46 million, a labor-force participation rate of 75 percent, and an unemployment rate of 8 percent. How many people were unemployed? (a) 2.54 million (b) 2.76 million (c) 3.68 million (d) 8 million 9. If the natural rate of unemployment is 5.2 percent and the actual rate of unemployment is 5.7 percent, then by definition there is (a) cyclical unemployment amounting to 0.5 percent of the labor force (b) frictional unemployment amounting to 0.5 percent of the labor force (c) structural unemployment amounting to 0.5 percent of the labor force. (d) search unemployment amounting to 0.5 percent of the labor force.

Explanation / Answer

Question 8

Labor force participation rate is calculated as follows -

Labor force participation rate = (Labor force/Adult population) * 100

75 = (Labor force/46 million) * 100

Labor force = (75 * 46 million)/100

Labor force = 34.5 million

Unemployment rate is calculated as follows -

Unemployment rate = (Unemployed/Labor force) * 100

8 = (Unemployed/34.5 million) * 100

Unemployed = (8 * 34.5 million)/100 = 2.76 million

There are 2.76 million unemployed people.

Hence, the correct answer is the option (b).

Question 9

If actual rate of unemployment is greater than the natural rate of unemployment then there exists cyclical unemployment in the economy.

Cyclical unemployment rate = Actual rate of unemployment - Natural rate of unemployment

Cyclical unemployment rate = 5.7% - 5.2% = 0.5%

So,

There is cyclical unemployment amounting to 0.5 percent of the labor force.

Hence, the correct answer is the option (a).

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---