Suppose that the total labor force is 100 individuals with 10 unemployed. The unemployment rate is ________. Now assume that 10 people drop out of the labor force and that 10 remain unemployed. The new unemployment rate is ________.
A) 9 percent; 10 percent
B) 10 percent; 9 percent
C) 10 percent; 11 percent
D) 11 percent; 10 percent

Question

Quizplus · Accepted Answer

Initially, the unemployment rate is calculated as (10 unemployed / 100 total labor force) * 100 = 10%. After 10 people drop out, the new labor force is 90 individuals, with 10 still unemployed, making the new unemployment rate (10 unemployed / 90 total labor force) * 100 = 11.11%, which rounds to 11 percent.

Suppose That the Total Labor Force Is 100 Individuals with 10