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9 December, 12:39

Suppose that the adult population is 4 million, the number of unemployed is 0.25 million, and the labor-force participation rate is 75%. What is the unemployment rate?

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  1. 9 December, 13:33
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    The unemployment rate is 8.3%

    Explanation:

    The formula for computing the unemployed rate is as follows:

    Unemployed rate = Number of Unemployed persons / Labor Force

    The labor force is the aggregate of the unemployed and the employed persons. So, through dividing the number of the persons who are unemployed through labor force.

    In this case, it is computed as:

    Number of unemployed persons is 0.25 million

    Labor force = Population * Participation rate

    = 4 million * 75%

    = 3

    Therefore, the unemployment rate is as:

    Unemployment rate = 0.25 / 3

    = 8.3%
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