Suppose the current unemployment rate is 5 percent, the labor force is 400 million people, the labor force participation rate is 80 percent and the working-age population is 500 million people. What number of people are unemployed?
A) 25 million people
B) 100 million people
C) 20 million people
D) 5 million people

Question

Quizplus · Accepted Answer

The number of people in the labor force can be calculated by multiplying the labor force participation rate by the working-age population:

400 million = 80% x 500 million

The number of people employed can be found by subtracting the number of unemployed from the labor force:

400 million - (5% x 400 million) = 400 million - 20 million = 380 million

Therefore, the number of people unemployed is:

400 million - 380 million = 20 million

So, the correct answer is C) 20 million people.

Suppose the Current Unemployment Rate Is 5 Percent, the Labor