The population of a small town is 5,000. There are 4,000 people in the labor force, and 3,500 people are employed. The unemployment rate equals

Question

Quizplus · Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed individuals by the total labor force and multiplying by 100.

Number of unemployed individuals = labor force - number of employed individuals 
                                 = 4,000 - 3,500 
                                 = 500

Unemployment rate = (500/4,000) * 100 
                           = 12.5%

Therefore, the correct answer is C) 12.5 percent.

The Population of a Small Town Is 5,000