An economy has a labor force of 1,000. The total number of employed workers in the economy is 900, and the number of discouraged workers in the economy is 50. The unemployment rate in the economy in this case is _____ percent.
A) 5
B) 10
C) 15
D) 20

Question

Quizplus · Accepted Answer

The unemployment rate is calculated as the number of unemployed individuals divided by the labor force, then multiplied by 100. In this case, there are 100 unemployed individuals (1,000 labor force - 900 employed) out of a labor force of 1,000. Therefore, the unemployment rate is (100/1,000) * 100 = 10%. Discouraged workers are not included in the labor force calculation.

An Economy Has a Labor Force of 1,000