The table below shows unemployment and labor force statistics for an economy. Actual rate of unemployment 3% Natural rate of unemployment 4% Population of the country 125 million Number of people employed 97 million Number of people unemployed 3 million Number of people employed part time 5 million Number of discouraged workers 2 million (a) Calculate the size of the labor force. Show your work. (b) Calculate the labor force participation rate. Show your work. (c) Given the state of the economy described in the table, is actual real output less than, greater than, or equal to potential real output? Explain.
The table below shows
| Actual rate of unemployment | 3% |
| Natural rate of unemployment | 4% |
| Population of the country | 125 million |
| Number of people employed | 97 million |
| Number of people unemployed | 3 million |
| Number of people employed part time | 5 million |
| Number of discouraged workers | 2 million |
(a) Calculate the size of the labor force. Show your work.
(b) Calculate the labor force participation rate. Show your work.
(c) Given the state of the economy described in the table, is actual real output less than, greater than, or equal to potential real output? Explain.
(d) Calculate what the cyclical unemployment rate would be if the actual rate of unemployment increased to 5 percent. Show your work.
(e) Suppose discouraged workers reenter the labor force and find employment. Will the actual rate of unemployment increase, decrease, or stay the same?
Hello. Since you have posted multiple parts of the question and not specified which part of the question needs to be solved, we will solve the first three part of the question for you. If you want any other specific question to be solved, then please resubmit only that question or specify that part only.
On the basis of the table, we can solve the given below the question.
a) Labour force is defined as the total number of people above the age of 18 and below the age 60 who are employed or not employed, it means either working or looking for the job.
Size of labour force = employed + unemployed + part-time workers
= 97 + 3 + 5
= 105 million
b) The labour force participation rate is a proportion of an economy's dynamic labour force. The equation for the number is the amount of all labourers who are utilized or effectively looking for job separated by the all-out non-regulated, non-military personnel working-age populace.
Labour force participation rate = (105/105 +2) *100
= (105/107) *100
= 98.13%
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