Answered: AMY: The total labor force is _________…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the following dialog between Amy, an economics student who currently studies macroeconomics, and Deborah, her teaching assistant.
AMY: Hi Deborah, I'm working on my Aplia homework and realized that I do not understand the definition of the labor force very well. Does it include discouraged workers?

DEBORAH: Hi Amy, the conventional definition of the labor force excludes discouraged workers. This is because they gave up looking for jobs . Also, be sure not to mistake discouraged workers for part-time workers. The key difference is that the latter cannot find suitable full-time jobs .

AMY: I think I understand it now, thank you.

DEBORAH: Let me ask you a question to see if you can apply your knowledge. Consider an economy with 20 full-time workers, 16 part-time workers, 10 workers who have been laid off but are actively looking for a new job, and 3 formerly full-time workers who have been without a job for over a year, failed to find any, and gave up looking. Can you please calculate the total labor force and the unemployment rate for this economy?

AMY: The total labor force is _________ (fill in the blank) workers and the unemployment rate is _______ (options: 26.0000%, 360.0000%, 36.0000%, 21.7391%, 4.6000%)

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