Of the 500,000 people (age 16+) in a particular country, 300,000 people are in the labor force.Of these, 240,000 are employed and 60,000 are unemployed.Of the 200,000 workers not in the labor force, 20,000 want jobs but have given up looking for one.What is the unemployment rate if discouraged workers are counted as being unemployed?

Question

Quizplus · Accepted Answer

The unemployment rate is the number of unemployed people divided by the total labor force.

Total labor force = employed + unemployed = 240,000 + 60,000 = 300,000

Total number of people who want to work = unemployed + discouraged workers = 60,000 + 20,000 = 80,000

So the unemployment rate, including the discouraged workers, is:

(60,000 + 20,000) / 300,000 = 80,000 / 300,000 = 0.2667

Multiplying by 100 to get a percentage:

0.2667 x 100 = 26.67%, which rounds up to 25%.

Therefore, the best choice is C.

Of the 500,000 People (Age 16+) in a Particular Country