Suppose country A has a total population of 1200. There are 200 children and 1000 adults. Of the 1000 adults, 850 are employed. Of the remaining 150 adults, 100 are not employed but are actively seeking work, and the remaining 50 are not employed and not actively seeking work.

a. calculate and interpret the labor force participation rate.

b. Calculate the unemployment rate and interpret it.

Suppose of the 100 individuals who are unemployed, 20 are in the middle of a job search, 50 have skills that are outmoded for the current economy, and the remaining 30 are unemployed due to an economic downturn. .

c. How many people are naturally unemployed? Explain.

d. What is the natural rate of unemployment? Interpret this rate.

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a Labor force participation rate is the number of working popu... View the full answer