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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

Based on the following data, compute (a) the unemployment rate, (b) the structural unemployment rate, and (c) the cyclical unemployment rate:

Frictional unemployment rate 2 percent
Natural unemployment rate 5 percent
Civilian labor force 100 million
Number of employed persons 82 million

(a)

To determine

The rate of unemployment.

Explanation

Given the frictional unemployment is 2 percent, the natural unemployment rate is 5 percent, the Civilian labor force is 100 million and the number of employed people is 82 million.

The number of unemployed people can be calculated as the difference between the civilian labor force and the number of employed people. The number of unemployed people can be calculated using Equation (1) as follows:

Number of unemployed people=(Civilian labor forceNumber of employed people) (1)

The number of unemployed people can be calculated by substituting the respective values in Equation (1) as follows:

Number of unemployed people=10082=18

Thus, the number of unemployed people is 18 million

(b)

To determine

The structural unemployment rate.

(c)

To determine

The cyclical unemployment rate.

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