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28 November, 00:58

In an economy of 100 people in the labor force, if 10 people are unemployed for 4 weeks during the year, and 30 people are unemployed for 8 weeks during the year, and the rest are employed continuously throughout the year, then the average duration of unemployment in this economy is:

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  1. 28 November, 01:28
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    7 weeks

    Explanation:

    in total there are 40 unemployed people in the economy, and the average duration of unemployment will be:

    [ (10 unemployed x 4 weeks) + (30 unemployed x 8 weeks) ] / 40 unemployed = (40 + 240) / 40 = 280 / 40 = 7

    *I used an adjusted expected value formula = ∑ (unemployed x unemployment length) / total unemployed
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