In a small country, the population equals 5,000. There are 4,000 people in the labor force and 3,000 people are employed. The unemployment rate equals
A) 0.25
B) 0.6
C) 0.75
D) an undetermined amount given the lack of information.

Question

Quizplus · Accepted Answer

The unemployment rate is calculated as the number of unemployed people divided by the labor force. Here, 1,000 people are unemployed (4,000 in labor force - 3,000 employed), so the unemployment rate is 1,000/4,000 = 0.25.

In a Small Country, the Population Equals 5,000