Question

Suppose that in the small country of Eoflizeba there are 12 million people in the adult population, the labor-force participation rate is 70 percent, and that there are 7.6 million people employed.

To the nearest tenth, what is the unemployment rate?

10.5%

9.5%

6.7%

3.8%

Answer 1

Adult population= 12 million

Labor-force participation rate = 70%= 0.7

Employed population = 7.6 million

Labor-force participation rate= (Employed population+unemployed population) / Adult population

0.7= (7.6 million +unemployed population) / 12 million

0.7 x 12 million= 7.6 million +unemployed population

8.4 million - 7.6 million =unemployed population

Unemployed population= 0.8 million

Unemployment rate= Unemployed population / (Employed population+unemployed population) x 100

= 0.8 million / (0.8 million+7.6 million) x 100= 0.8million / 8.4 million x 100 = 9.5%