Question

Suppose that the adult population is 4 million, the number of unemployed is 0.25 million, and the labor-force participation rate is 75%. What is the unemployment rate? a. 8.3% b. 18.75% c. 6.25% d. 9.1%

Answer 1

Answer:

a. 8.3%

Step-by-step explanation:

Unemployment rate is the percentage of unemployed people amongst those who are available for work (labour force participation) not just the entire population.

So firstly we find the people who are available for work from the total population = $\frac{75}{100} * 4 000 000 = 3 000 000$

Then we find the unemployment rate:

$\frac{number of unemployed people}{number of people available to work}*100 = \frac{250000}{3000000}*100 = 8.3%$