Assume that in an economy with 200M inhabitants,90M work,4M are looking for a job,3M receive unemployment insurance compensation,and 6M receive unemployment insurance compensation and are looking for a job. What is the participation rate?
A) 51.5%
B) 50%
C) 45%
D) 38.5%

Question

Quizplus · Accepted Answer

The Participation Rate is calculated as the number of people in the labor force (employed or unemployed and looking for a job) divided by the total working-age population.

Labor Force = Employed + Unemployed and Looking for a Job

Labor force = 90M + 4M = 94M

Total Working-Age Population = Labor Force + Not in the Labor Force

Total Working-Age Population = 94M + (200M - 90M - 4M - 3M - 6M) = 101M

Participation Rate = (Labor Force / Total Working-Age Population) x 100

Participation Rate = (94M / 101M) x 100 = 93.07% ≈ 93% ≈ 50% (rounded to the nearest whole number)

Therefore, the best choice is B) 50%

Assume That in an Economy with 200M Inhabitants,90M Work,4M Are