Data for an economy shows that the unemployment rate is 5%, the participation rate is 60%, and 20 million people 15 years or older are not in the labour force. How many people are unemployed this economy?Group of answer choices1.8 million 1.5 million1.2 million0.6 million
Question
Data for an economy shows that the unemployment rate is 5%, the participation rate is 60%, and 20 million people 15 years or older are not in the labour force. How many people are unemployed this economy?Group of answer choices1.8 million 1.5 million1.2 million0.6 million
Solution
To answer this question, we first need to find out the total number of people in the labor force.
Given that the participation rate is 60%, this means that 40% of the people 15 years or older are not in the labor force.
If 20 million people represent this 40%, we can calculate the total number of people 15 years or older in this economy by dividing 20 million by 0.4 (which is the decimal equivalent of 40%).
20 million / 0.4 = 50 million people
This means that there are 50 million people 15 years or older in this economy.
Since the participation rate is 60%, we can calculate the number of people in the labor force by multiplying the total number of people 15 years or older by the participation rate.
50 million * 0.6 = 30 million people
This means that there are 30 million people in the labor force.
Finally, we can calculate the number of unemployed people by multiplying the number of people in the labor force by the unemployment rate.
30 million * 0.05 = 1.5 million people
So, there are 1.5 million people unemployed in this economy.
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