Suppose initially that the working-age population is 220 million, the labor force is 150 million, and the official U-3 unemployment rate is 10 percent
5 million new jobs are created and filled by 5 million people who had previously been discouraged workers. What is the new U-3 unemployment rate? A) 6.25 percent
B) 6.7 percent
C) 9.7 percent
D) 8.7 percent
C
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The measure of GDP which effectively updates the prices for the base year each year and reduces the errors from changes in relative prices and the introduction of new goods and services is called the
A) nominal GDP. B) real GDP. C) deflated GDP. D) chain-weighted GDP.
If the Fed sells U.S. government securities to drain reserves from banks, which of the following is most likely to occur? a. The demand for money will increase and the interest rate will rise
b. The money supply will increase and the interest rate will fall. c. The interest rate will rise and the quantity of money demanded will fall. d. The money supply will decrease and the interest rate will fall. e. The interest rate will fall and the quantity of money demanded will increase.