The table below shows unemployment and labor force statistics for an economy. Actual rate of unemployment 3%Natural rate of unemployment 4%Civilian, noninstitutional population age 16 and over 125 millionNumber of people employed full time 92 millionNumber of people employed part time 5 millionNumber of people unemployed 3 millionNumber 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?
The table below shows
Actual rate of unemployment 3%
Natural rate of unemployment 4%
Civilian, noninstitutional population age 16 and over 125 million
Number of people employed full time 92 million
Number of people employed part time 5 million
Number of people unemployed 3 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?
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