Question

3. Calculate the following given the information about the economy in the table: Show work

Total population 236 Million

Those in institutions: 10 Million

Those in the military: 17 Million

Under the age of 16: 23 Million

Those who are unwilling or unable to (voluntarily idle): 42 million

Employed: 140 Million

Those seeking employment: 4 Million

a. Labor force. ____________

b. Unemployment rate. _____________ (go out two decimals) Show work.

New unemployment rate when 2 million employed workers are sent off to prison: ____________ (show work)

Answer 1

Answer. (a) Labor force consists of people who are either employed or unemployed but actively seeking work. People studying in institutions, serving in military, underage, or discouraged workers are not counted in labor force. So in this question labor force = 140 million + 4 million = 144 million

(b) Unemployment rate is the number of people unemployed but looking for work divided by the size of labor force. So unemployment rate = 4/144 = 0.027. You can round it off to 0.03 also.

(c) When 2 million employed workers are sent to prison, the labor force falls by 2 million, that is 144-2 = 142 million is the new labor force. But number of people unemployed and looking for work is still the same, 4 million. So new unemployment rate = 4/142 = 0.028. You can round it off to 0.03 also