Data for an economy show that the unemployment rate is 6 percent, the participation rate is 60 percent, and 200 million people 16 years or older are not in the labor force. How many people are in the working-age population in this economy?

Question

Quizplus · Accepted Answer

Since the participation rate is 60 percent, 40 percent are not participating in the labor market. So the 200 million people are not participating represent 40 percent of the working-age population, or (0.40x)= 200,000,000, where x is working-age population. Then x = 200,000,000/0.4 = 500,000,000, or 500 million.

Data for an Economy Show That the Unemployment Rate Is