Introductory Econometrics: A Modern Approach 6th Edition by Jeffrey M Wooldridge

Exercise 4

Suppose the unemployment rate in the United States goes from 6.4% in one year to 5.6% in the next.

(i) What is the percentage point decrease in the unemployment rate?

(ii) By what percentage has the unemployment rate fallen?

Step 1 of 2

The unemployment rate in one year is 6.4% and in next year is 5.6%.

(i) The percentage point change in the difference between two percentage points. Therefore point decrease is equal to 0.8%.