Data for an economy shows that the unemployment rate is 10%, 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

The working-age population includes those in the labor force and those not in the labor force. If 200 million are not in the labor force and the participation rate is 80%, then the labor force is 80% of the working-age population. Let X be the working-age population: 0.8X = labor force. Since 200 million are not in the labor force, X - 0.8X = 200 million, so 0.2X = 200 million, thus X = 1 billion.

Data for an Economy Shows That the Unemployment Rate Is