Data for an economy show that the unemployment rate is 10%,the participation rate is 80%,and 200 million people 15 years or older are not in the labour force.How many people are employed in this economy?
A) 18 million.
B) 180 million.
C) 720 million.
D) 792 million.
E) 800 million.

Question

Quizplus · Accepted Answer

To find the number of employed people, first calculate the total labor force. If 200 million are not in the labor force and the participation rate is 80%, then the total working-age population is 200 million / (1 - 0.8) = 1,000 million. The labor force is 80% of this, which is 800 million. With a 10% unemployment rate, 90% of the labor force is employed, so 0.9 * 800 million = 720 million people are employed.

Data for an Economy Show That the Unemployment Rate Is