A country with a civilian population of 120,000 (all over age 16) has 100,000 employed and 10,000 unemployed persons, of which 5,000 are frictionally unemployed and another 3,000 structurally unemployed
a. What is the size of the labor force?
b. What is the actual unemployment rate?
c. What is the labor force participation rate?
d. What is the employment/population ratio?
e. What is the natural rate of unemployment?
f. Is this economy in a recession or a boom? Explain.
a. 110,000
b. 9.09 percent
c. 91.67 percent
d. 83.3 percent
e. 7.3 percent
f. The economy is in a recession because actual unemployment is above the natural rate.
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