Use the table below to answer the following questions:
|
Labor Force
|
Number of People (in millions)
|
|
Employed
|
157.3
|
|
Structurally unemployed
|
5.2
|
|
Cyclically unemployed
|
5.3
|
|
Frictionally unemployed
|
2.9
|
Instructions: Round your answers to 2 decimal places.
a. Calculate the actual unemployment rate and the natural rate of unemployment for this economy.
Actual rate of unemployment: %
Natural rate of unemployment: %
b. Now assume that cyclical unemployment decreases by 1.7 million while structural unemployment increases by 0.5 million. Calculate the unemployment rate and the natural rate of unemployment for this economy.
Actual rate of unemployment: %
Natural rate of unemployment: %