Author Question: What is the definition of the unemployment rate? How are part-time workers and discouraged workers ... (Read 109 times)

@Brianna17 · **on:** Jun 29, 2018

What is the definition of the unemployment rate? How are part-time workers and discouraged workers treated when calculating the unemployment rate?

What will be an ideal response?

Question 2

If the quantity of money grows at 3 percent per year, velocity does not grow, and real GDP grows at 2 percent per year, then the inflation rate equals

A) -1 percent. B) 1 percent. C) 6 percent. D) 5 percent. E) 12 percent.

abctaiwan · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

The definition of the unemployment rate is (number of unemployed)/(labor force) 100. In this calculation, the labor force equals the sum of employed plus unemployed people. Part-time workers are counted as employed. Thus part-time workers are counted in the labor force but are NOT counted as unemployed. Discouraged workers are people who have stopped looking for work and so are not in the labor force. Hence, when calculating the unemployment rate, discouraged workers are counted in neither the number of unemployed nor in the labor force.

Answer to Question 2

B