Answer to Question #225009 in Macroeconomics for Thomas Haundjangi

Question

2.1. Suppose there are 180 million employed people and 20 million unemployed people.

a) What is the unemployment rate? (5 marks)

b) Suppose that 5 million unemployed people give up their search for jobs and become discouraged workers. What is the new official unemployment rate?

Answer 1

unemployment rate=unemployed/total labour force multiplied by one hundred percent

(a) 20/200*100%=10%

(b)15/200*100%=7.5%