Question

During the course of a​ year, the labor force consists of the same 1 comma 025 people. Of​ these, 18 lack skills that employers desire and hence remain unemployed throughout the year. At the same​ time, every month during the​ year, 24 different people become​ unemployed, and 24 other different people who were unemployed find jobs. There is no cyclical unemployment. a.)Calculate thr frictional unemployment rate _____% (rounded to two decimal places)b.) Calculate the unemployment rate ______% (rounded to two decimal places)

Answer 1

Answer: 2.34% ; 4.10%

Explanation:

Total number of Labor force = 1,025

Number of people lacking skills = 18

Also, monthly 24 people become unemployed while 24 also gets employed

Frictional unemployment rate:

Number actively searching for job / total labor force

(24 / 1025) ×100

0.0234 × 100 = 2.34%

Unemployment rate :

(Number of actively searching + number lacking required skills) / labor force

[(24 + 18) / 1025] × 100

(42/ 1025) × 100

0.04097 × 100

= 4.097%

=4.10%