Econia has a population of 1 million. There are 350,000 persons under age 16 and 550,000 persons age 21 or older. There are 400,000 employed persons, 30,000 unemployed persons, 60,000 retired persons, and 30,000 full-time homemakers. What is the U3 unemployment rate in Econia? Round to one decimal place.

Question

Quizplus · Accepted Answer

The U3 unemployment rate is calculated as the number of unemployed persons divided by the labor force, then multiplied by 100 to get a percentage. The labor force includes those who are employed and those who are unemployed but looking for work. In Econia, the labor force is 400,000 (employed) + 30,000 (unemployed) = 430,000. The number of unemployed persons is 30,000. Therefore, the U3 unemployment rate is (30,000 / 430,000) * 100 = 7.0%.

Econia Has a Population of 1 Million