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Check PDF in below and answer all the question 1 and 300 words long for question 2.
1. The following table shows the adult population (labor market data) for country Z. Employed 90,000 Frictionally unemployed 6,000 Cyclically unemployed 4,000
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Explanation & Answer
Attached.
1
MACROECONOMICS
Macroeconomics
Student’s Name
Institutional Affiliation
2
MACROECONOMICS
Macroeconomics
Unemployment rate
Unemployment rate =Unemployed people/ total number of people in the labor force
Unemployed people= 6,000(frictionally unemployed) + 4,000( cyclically unemployed) + 2,000(
Structurally unemployed =12,000
Total people in the civilaian labor force = 90,000
Hence unemployment rate =12,000/90,000=0.133
0.133 multiplied by 100= 13.3%
Labor participation rate
Labor participation rate = labor force/ total adult population
Labor
force=90,000(employed)
+
6,000(frictionally
unemployed)
+
4,000(cyclically
unemployed)+2,000(structurally unemployed)=102,000
Total population= 50,000+2,000+4,000+6,000+ 90,000=152,000
Hence 102,000/152,00=0.671 multiplied by 100= 67.1%
Hence LFPR= 67.1%
Country Z having a natural rate of unemployment
Yes, country Z has a natural unemployment as its population is inclusive of frictional,
structural and cyclical unemployed people.
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