Question

Suppose the town of Boone has a total population of 70,000 people. Of those, 65,000 people are employed. There are 1,000 full-time students who are not employed or actively seeking work. The rest of the people are out of work but have been actively seeking work within the past four weeks.
Instructions: In part a, round your answer to 1 decimal place. In part b, enter your answer as a whole number.
a. What is Boone’s unemployment rate?
percent
b. Suppose there are 1,000 people who are unemployed as a result of frictional unemployment and 2,000 people who are unemployed as a result of cyclical unemployment. How many people are unemployed as a result of structural unemployment?

Answer 1

Answer:

A. 5.8%

B. 1,000

Explanation:

Calculation for Boone’s unemployment rate

Unemployment rate=[(70,000-1,000)-65,000]/(70,000-1,000)*100

Unemployment rate=(69,000-65,000)/69,000*100

Unemployment rate=4,000/69,000*100

Unemployment rate=5.8%

Therefore Boone’s unemployment rate will be 5.8%

B. Calculation for How many people are unemployed as a result of structural unemployment

Unemployed people=[(70,000-1,000)-65,000]-1,000-2,000

Unemployed people= 4,000 - 1,000 - 2,000

Unemployed people=1,000

Therefore the numbers of people that are are unemployed as a result of structural unemployment will be 1,000