In a country, the adult population equals 100,000. There are 50,000 people unemployed and 40,000 people are employed. The labor force participation rate equals

A) 90 percent.
B) 50 percent.
C) 40 percent.
D) an undetermined amount given the lack of information.

1 answer

B) 50 percent.

Labor force participation rate is the percentage of the adult population (i.e. the total number of people who are able to work) that is either employed or actively seeking employment.

In this scenario, the labor force equals the number of employed individuals plus the number of unemployed individuals, which is 40,000 + 50,000 = 90,000.

Therefore, the labor force participation rate is 90,000/100,000 = 0.9, or 90 percent.