Consider a country with 300 million residents, a labor force of 150 million, and 10 million unemployed. Answer the following questions. If 5 million of the unemployed become discouraged and stop looking for work, what is the new unemployment rate? Suppose instead that 30 million jobs are created, attracting 20 million new people into the labor force. What would be the new rates for labor force participation and unemployment?

Macroeconomics
13th Edition
ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter6: Macroeconomic Measurements, Part I: Prices And Unemployment
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Consider a country with 300 million residents, a labor force of 150 million, and 10 million unemployed. Answer the following questions.

If 5 million of the unemployed become discouraged and stop looking for work, what is the new unemployment rate?

Suppose instead that 30 million jobs are created, attracting 20 million new people into the labor force. What would be the new rates for labor force participation and unemployment?

 

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