2. The unemployment rate is 6 percent. If the population is 300 million, and the number

unemployed is 6 million and the number employed is 94 million, what is the size of the labor

force?

3. Suppose the current unemployment rate is 5 percent, the labor force is 400 million people, the

labor force participation rate is 80 percent and the working-age population is 500 million people.

What number of people are unemployed?

4. Suppose that ABC population is 275 million. Also assume that the labor force is 135 million and

that 130 million people are employed. Calculate the unemployment rate.

5. Suppose the working-age population is 150 million, the labor force is 125 million, and

employment is 120 million.

a. What is the unemployment rate?

b. Now suppose that 2 million students graduate from college and begin to look for jobs.

What is the new unemployment rate if none of the students have found jobs yet?

c. Suppose that all 2 million students find jobs. What is the unemployment rate now?

6. Suppose there are 180 million employed people and 20 million unemployed people.

a. What is the unemployment rate?

b. Suppose that 5 million unemployed people give up their search for jobs and become

discouraged workers. What is the new official unemployment rate?

7. Consider the following scenario. Initially the economy has 90 million people working, 10 million

people unemployed, and 20 million people not in the labor force. Then prospects for the

economy improve. Five million people who previously were not in the labor force now join the

10 million previously unemployed in looking for work. For now, the economy remains with 90

million workers. What happens to the unemployment rate?

8. If the base year CPI basket costs $250 and next year the CPI basket costs $275, what is next

year's CPI?

9. The tables below give the purchases of an average consumer in a small economy. (These

consumers purchase only loaves of bread and jugs of soda.) Suppose 2012 is the reference base