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Unemployment Rate

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Economics
School
Saudi electronic university
Type
Homework
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Running head: THE UNEMPLOYMENT RATE 1
The Unemployment Rate
Name:
Institution:

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THE UNEMPLOYMENT RATE 2
The unemployment rate is one of the economic growth indicators of a country in the
sense that when it decreases, the economic growth rises. But what happens when the
unemployment rate does not show the economic development of a nation? To understand this
theory, one must fully comprehend what unemployment means. There are groups of people such
as children, the elderly, retired, college part-timers, and people who are on parental leave are
counted as unemployed, and yet they should not. Hence it is difficult to measure the rate of
unemployment when the government does not categorize these groups appropriately. Others are
available and capable of working, but because they have given up on looking for jobs, the
government counts them as out of labor force. In some cases, some people may be having small
jobs that are not to their liking, but they report being unemployed.
Thus, while unemployment may be an indicator of economic success, it still has
downfalls that the government must address. For this reason, a nation to report low
unemployment rates, but the economy is still stagnant. For instance, in Saudi Arabia, the
unemployment rate rose to 5.92% in 2018. This increase in the unemployment rate is supposed
to indicate a downfall in economic growth. However, Saudi Arabia reported a projection
economic growth of approximately 782.48 billion U.S. dollars. 2018 was the year that Saudi
Arabia reported the highest GDP growth representing 1.26% of the global economy. These
statistics reveal that even though the unemployment rate increased, Saudi Arabia still indicated a
high growth in its economy. In Saudi Arabia, most of the employed people work in the oil and
gas industry, which is the country’s economic base (Plecher, 2019).

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Running head: THE UNEMPLOYMENT RATE The Unemployment Rate Name: Institution: 1 THE UNEMPLOYMENT RATE 2 The unemployment rate is one of the economic growth indicators of a country in the sense that when it decreases, the economic growth rises. But what happens when the unemployment rate does not show the economic development of a nation? To understand this theory, one must fully comprehend what unemployment means. There are groups of people such as children, the elderly, retired, college part-timers, and people who are on parental leave are counted as unemployed, and yet they should not. Hence it is difficult to measure the rate of unemployment when the government does not categorize these groups appropriately. Others are available and capable of working, but because they have given up on looking for jobs, the government counts them as out of labor force. In some cases, some people ...
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