Suppose that some country had an adult population of about 25 million, a labor-force participation rate of 60 percent, and an unemployment rate of 6 percent. How many people were employed?

a.

0.9 million
b.

14.1 million
c.

23.5 million
d.

15 million

1 answer

To calculate the number of people employed, we can follow these steps:

  1. Calculate the labor force: The labor force participation rate tells us the percentage of the adult population that is either employed or actively seeking employment. \[ \text{Labor Force} = \text{Adult Population} \times \text{Labor Force Participation Rate} \] Given that the adult population is 25 million and the participation rate is 60% (or 0.60), we can calculate the labor force: \[ \text{Labor Force} = 25 \text{ million} \times 0.60 = 15 \text{ million} \]

  2. Calculate the number of unemployed: The unemployment rate tells us the percentage of the labor force that is unemployed. \[ \text{Unemployed} = \text{Labor Force} \times \text{Unemployment Rate} \] With an unemployment rate of 6% (or 0.06): \[ \text{Unemployed} = 15 \text{ million} \times 0.06 = 0.9 \text{ million} \]

  3. Calculate the number of employed: The number of employed individuals can be found by subtracting the number of unemployed individuals from the labor force: \[ \text{Employed} = \text{Labor Force} - \text{Unemployed} \] \[ \text{Employed} = 15 \text{ million} - 0.9 \text{ million} = 14.1 \text{ million} \]

The answer is: b. 14.1 million