In 2020, the country of North had a population of 35 million and a working-age population of 25 million. Full-time employment in 2020 was 15 million, and part-time employment was 2 million. Three million people were unemployed. Required: Determine North’s labour force participation rate for 2020. Determine North’s unemployment rate for 2020. Assume 50% of the part-time employment workers were involuntary part-time workers and 1 million other people were discouraged workers. Determine North’s labour underutilization rate for 2020.
In 2020, the country of North had a population of 35 million and a working-age population of 25 million. Full-time employment in 2020 was 15 million, and part-time employment was 2 million. Three million people were unemployed. Required: Determine North’s labour force participation rate for 2020. Determine North’s unemployment rate for 2020. Assume 50% of the part-time employment workers were involuntary part-time workers and 1 million other people were discouraged workers. Determine North’s labour underutilization rate for 2020.
Chapter12: Business Cycles And Unemployment
Section: Chapter Questions
Problem 3SQP
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In 2020, the country of North had a population of 35 million and a working-age population of 25 million. Full-time employment in 2020 was 15 million, and part-time employment was 2 million. Three million people were unemployed.
Required:
- Determine North’s labour force participation rate for 2020.
- Determine North’s
unemployment rate for 2020. - Assume 50% of the part-time employment workers were involuntary part-time workers and 1 million other people were discouraged workers. Determine North’s labour underutilization rate for 2020.
- Sally Wong is a resident of North and is unemployed because she lost her job in a clothing factory that closed due to international competition. Identify the type of unemployment that Sally is experiencing.
- Identify the type of unemployment that would need to be zero in order to determine a country’s natural rate of unemployment.
- Assume North’s economists estimated the natural rate of unemployment at 7%. The following table consists of the unemployment rates from a labour force survey for selected months:
|
Month |
Structural |
Seasonal |
Frictional |
Cyclical |
|
March |
3% |
1% |
2% |
5% |
|
April |
3% |
2% |
3% |
3% |
|
May |
3% |
1% |
1% |
1% |
Identify whether there was a recessionary gap or an inflationary gap in each of March, April, and May.
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