In June there are 30,000 people classified as unemployed and the size of the labor force is 600,000. The only change between June and July is that 10,000 of the unemployed give up looking for work. Which of the following is true?
A) In June the unemployment rate was 6% and in July the unemployment rate was 3.8%.
B) The unemployment rate in both June and July was 5%.
C) In June the unemployment rate was 5% and in July the unemployment rate was 3.39%.
D) In June the unemployment rate was 3.8% and in July the unemployment rate was 6%.

Question

Quizplus · Accepted Answer

To calculate the unemployment rate, we need to divide the number of unemployed individuals by the total labor force and multiply by 100.

In June, the unemployment rate was:

(30,000 / 600,000) x 100 = 5%

In July, the number of unemployed individuals decreased by 10,000, so the total number of unemployed individuals is now 20,000. The labor force remains the same at 600,000.

Therefore, the unemployment rate in July is:

(20,000 / 600,000) x 100 = 3.33%

So we can see that the only answer choice that is close to this calculation is choice C.

In June There Are 30,000 People Classified as Unemployed and the Size