Quiz 5: Monitoring Jobs and Inflation

Business

a. Unemployment rate is the percentage of the people in the labor force who are unemployed. It is calculated as: img Here, img Consider the following values: img Now, by using formula of labor force, calculate number of unemployed as follows: img img Now, use the unemployment rate formula: img img img Hence, the unemployment rate is 9.49 % b. Labor force participation rate measures the percentage of the working age population who are part of labor force. The number of people in labor force signals the willingness of people of working age to do jobs. img ……(1) Here: img Substituting the given values in equation (1): img Therefore, labor force participation rate is 64.6% c. Employment to population represents the proportion of people in working age who have been successful in finding job. It not only tells about creation and availability of jobs, but also the degree of match between skill of people and requirement of jobs. img Consider the following values to calculate the employment to population ratio: img Substituting the values in the formula: img Thus, employment to population ratio is 58.4%

a) Unemployment rate is the fraction of labor force that is out of work. It is thus the number of unemployed workers divided by total labor force. Given that, in July 2014, employed workers are 10,000 and unemployed workers are 1,000, the size of labor force is the sum of these two values which is 11,000 workers. Calculate the unemployment rate as: img Therefore, the unemployment rate is 9.09 percent. b) Given that, in July 2014, employed workers are 10,000, unemployed workers are 1,000 workers and those out of labor force include 5,000 workers. Hence the population is 16,000. Employment to population ratio is computed as: img Hence, the employment-to-population ratio is 62.5 percent. c) From July 2014 to August 2014, 150 workers moved from the pool of unemployed to the pool of employed. Around 40 people entered the labor force but remained unemployed and 50 people left the labor force who were previously working. Hence, total unemployment was decreased from 1,000 to 890. d) From July 2014 to August 2014, 80 people lost their jobs (and did not look for work), 20 people quit the labor force by retiring, 150 workers moved from the pool of unemployed to the pool of employed. Around 40 people entered the labor force but remained unemployed and 50 people left the labor force. Hence, total employment was unchanged and remained at 10,000. e) Given that, in July 2014, employed workers are 10,000 and unemployed workers are 1,000, the size of labor force is the sum of these two values which is 11,000 workers. In August 2014, unemployed workers were 890 and employed workers unchanged at 10,000. Hence labor force was reduced to 10890. Calculate the unemployment rate as: img Therefore, the unemployment rate is 8.17 percent.

Unemployment rate is the percentage of the people in the labor force who are unemployed. Unemployment rate declined from 10% in October 2009 to 8.9 % in October 2011 but labor force was unchanged. Unemployment rate is calculated as: img This means total unemployed people must have declined if labor force has remained constant in 2009 - 2011 and unemployment rate has declined in the same period.