Problems & Exercises for MACRO

UNIT TWO (FOR EXAM TWO)

Unit Two--Assignment Two--Web Problem 2

In the imaginary economy of Beta, the size of the labor force is forty million and four million people are unemployed. What is the unemployment rate?

Now redetermine the unemployment rate with the following changes:

800,000 unemployed persons drop out of the labor force

Refer back to the initial conditions (40M & 4M); Now assume that 800,000 persons join the labor force but can't find jobs.


Please send e-mail with your responses. (Hint: you'll need to adjust both the numerator and the denominator.)