In an economy of 100 people in the labor force, if 10 people are unemployed for 4 weeks during the year, and 30 people are unemployed for 8 weeks during the year, and the rest are employed continuously throughout the year, then the average duration of unemployment in this economy is:

Question

Quizplus · Accepted Answer

To find average duration of unemployment, count the number worker-weeks that the unemployed were out of work and divide by the number of unemployed. In this case: (10 × 4)+ (30 × 8)= 280/40 = 7.

In an Economy of 100 People in the Labor Force