Consider an economy with a labor force of 100 million people. Each period, 60% of the unemployed population finds a job while 20% of the employed population loses their job. What is the steady-state unemployment rate in the economy? a. 25% b. 60% c. 40% d. 20% e. 33% 25% is the correct answer please explain why it is and how you solved to get it.

Consider an economy with a labor force of 100 million people. Each period, 60% of the unemployed population finds a job while 20% of the employed population loses their job. What is the steady-state unemployment rate in the economy? a. 25% b. 60% c. 40% d. 20% e. 33% 25% is the correct answer please explain why it is and how you solved to get it.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter21: Unemployment

Section: Chapter Questions

Problem 45P: A country with a population of eight million adults has five million employed, 500,000 unemployed,...

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Question

a. 25%

b. 60%

c. 40%

d. 20%

e. 33%

25% is the correct answer please explain why it is and how you solved to get it.

Definition Definition State in which an individual is without work, despite actively seeking employment opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed. Unemployment is one of the key indicators of the conditions prevailing in an economy. It is therefore considered a barometer that points out the condition of an economy.

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