Question

Suppose that 0.8 million currently unemployed workers decide to no longer actively look for work. what is the unemployment rate in this economy now?

Answer 1

Let's say that 0.8 million people who are currently unemployed decide to stop seeking jobs. The unemployment rate in this economy is 5.62%.

How much is unemployment?

The proportion of the working population without a job is known as the unemployment rate. It is a lagging indicator, thus rather than predicting changes in economic conditions, it typically rises or decreases as a result of them.

The unemployment rate is likely to increase if the economy is weak and there are few available jobs. It is normal to expect it to decrease when the economy is expanding healthily and there are plenty of available jobs.

What Is a Sufficient Rate of Unemployment?

Because lower rates might be viewed as inflationary due to pressure on wages from price increases, low unemployment is not regarded as beneficial. High unemployment rates are not thought to be good, though, as they may put financial pressure on consumer spending.

Although there is no universal agreement on what defines healthy unemployment, most experts believe that unemployment rates between 3% and 5% are optimum.

Calculation:

(Unemployed-0.8)/(labor force-0.8) x 100 = 8.50/151.20*100 = 5.62%.

Learn more about the unemployment rate with the help of the given link:

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