4th

EXERCISE I (20 points) Use two decimals when needed in this exercise. The economy of Naboo has a population of 10 million people, of which 7 million are in the labor force. 3 million people work in the construction sector, 2 million people work in the services sector, 1 million people work in the IT sector, and 1 million people are unemployed. a) (7 POINTS) Assuming that the fraction of unemployed construction workers with respect to total number of unemployed people is the same as the fraction of employed construction workers with respect to the total population; and the fraction of unemployed service workers with respect to total number of unemployed people is the same as the fraction of employed service workers with respect to the total population, how many construction workers are unemployed? How many service sector workers? b) (8 POINTS) Calculate the unemployment rate for the construction sector in Naboo. Calculate the unemployment rate for the service sector in Naboo. c) (5 POINTS) Suppose that the construction sector faces reduced demand, and is forced to lay off 2 million workers. 1.5 million of them stay in the labor force, while .5 million, discouraged by the layoffs, exit the labor force. Calculate the unemployment rate in Naboo .Page