Question

Suppose that an economy has 9 million people working full-time. It also has 1 million people who are actively seeking work but currently unemployed as well as 2 million discouraged workers who have given up looking for work and are currently unemployed. What is this economy’s unemployment rate?

Answer 1

Answer:

The unemployment rate refers to the rate, which may be denoted in terms of the percentage of the workers who are unemployed within a total labor force.

Explanation:

Unemployment rate = (unemployed / Labor force) * 100

= (10,00,000 / (90,00,000 + 10,00,000)) * 100

= (10,00,000 / 1,00,00,000) * 100

= 10%

Therefore, the unemployment rate is 10%