Written Assignment Unit 5 ECON1580.pdf - Written Assignment...

This preview shows page 1 out of 1 page.

Written Assignment Unit 5 ECON1580 Suppose an economy has 10,000 people who are not working but looking and available for work and 90,000 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 - What happens to the unemployment rate? Answer: People who get discouraged and give up their searches are called discouraged workers, and they are not counted as unemployed. It is good, because less people are searching work, but is bad, because the total labor force decreases.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture