Answer to Question #276389 in Macroeconomics for Jasmine

Question

If the number of employed (E) and the number of unemployed (U) each increase by 10,000 people, what happens to the unemployment rate? Why?

Answer 1

$u=\frac{U}{L}=\frac{U}{E+U}$

initially:

U=5000

E=10000

$u=\frac{U}{L}=\frac{U}{E+U}=\frac{5000}{5000+10000}=0.33$

U=15000

E=20000

$u=\frac{U}{L}=\frac{U}{E+U}=\frac{10000}{10000+20000}=0.33$

according to the formula will not change