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Written Assignment Unit 5 ECON1580 ●Suppose an economy has 10,000 people who are not working but looking and available for work and90,000 people who are working. What is its unemployment rate? Answer: Unemployment rate is the percentage of the labor force that is unemployed. Unemployment rate = unemployed / (employed + unemployed) Unemployed = 10,000 Employed = 90,000 Unemployment rate:= 10,000 / (90,000 + 10,000) = 10,000 / 100,000 = 10% Thus, the unemployment rate is 10% ●Now suppose 4,000 of the people looking for work get discouraged and give up their searches - Whathappens to the unemployment rate? Answer: People who get discouraged and give up their searches are called discouraged workers, and they are not counted asunemployed. It is good, because less people are searching work, but is bad, because the total labor force decreases.