Suppose a country using the United States\' system of calculating official unemp

Question

Suppose a country using the United States' system of calculating official unemployment statistics has 100 million people, of whom 50 million are working age. Of these 50 million, 20 million have jobs. Of the remainder: 10 million are actively searching for jobs; 10 million would like jobs but are not searching; and 10 million do not want jobs at all.

Q1: Refer to the information above. The labor force is

Q2: Refer to the information above. The labor force participation rate is

Q3: Refer to the information above. The official unemployment rate is

Explanation / Answer

1. labor force = 20 million(employed) + 10 million (unemployed) = 30 million

2. labor force participation rate = 30 million (labor force) / 50 million (working age) = 0.6 or 60%

3. official unemployment rate = 10 million (unemployed) / 30 million (labor force) = 0.333 or 33.3%

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