1. Unemployment rate Assume a country has a population of 40 million people of w

Question

1. Unemployment rate Assume a country has a population of 40 million people of which 2 million are unable to work, 1 million want to work but have given up looking for a job, 30 million are in the labor force, and 24 million are employed. What is the unemployment rate? A. 20% B. 80% ?. 0.8% D. 23% 2. GDP Which of the following statements about GDP is correct? A. The production by foreign citizens in the US is not included in GDP. B. The expenditure approach to calculating GDP for an open economy adds consumption, investment and government purchases. C. U.S. real GDP states the market value of all goods and services produced within the U.S. in a given time measured in current dollars. D. GDP is calculated using the value-added approach in order to avoid double-counting of the nation's output.

Explanation / Answer

1. Option A

Pop

40

Unable to work

2

Given up

1

labor force

30

Employed

24

Unemployed

6

The formula = unemployed/labor force

= (6/30)*100

= 20 percent

2. Option B,C,D

Pop

40

Unable to work

2

Given up

1

labor force

30

Employed

24

Unemployed

6

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