Data for an economy shows that the unemployment rate is 10 percent, the participation rate 80 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 80 percent, 20 percent are not participating in the labor market. So the 200 million people are not participating represent 20 percent of the working-age population, or (0.20x)= 200,000,000, where x is the working-age population. Then x = 200,000,000/0.20 = 1,000,000,000, or 1 billion

Data for an Economy Shows That the Unemployment Rate Is