(10 points) The following information is for the United States from February 200

Question

(10 points) The following information is for the United States from February 2000. (The numbers are in millions.)

Adults Not in Labor Force 67.74

Number Unemployed 5.80

Number employed 135.36

(2 points) How many people are in the labor force in 2000?

(2 points) What is the labor force participation rate in 2000?

(2 points) What is the unemployment rate in 2000?

(2 points) If the natural rate of unemployment is 5.0%, how much is cyclical unemployment?

(2 points) Based on this data, was the United States likely to be experiencing a recession in Feb 2000? Explain.

Explanation / Answer

Labour Force=Number Unemployed+Number employed
=5.80+135.36=141.16
the labor force participation rate in 2000=Labour Force/total adult population=141.16/208.9=0.675730014=67.57%(rounded to 2 decimal places)
the unemployment rate in 2000=Number Unemployed/Labour Force
=5.80/141.16= 0.0410881269=4.11%(rounded to 2 decimal places)
cyclical unemployment=-5+4.11=-0.89%

No, When business cycles are at their peak, cyclical unemployment will be low because total economic output is being maximized.

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