News Analysis: The Monthly Employment Situation Consider a hypothetical economy in which the labor force consists of 200 people. Of those, 180 people are employed full-time and 20 people are unemployed. The economy follows the same conventions as the U.S. Bureau of Labor Statistics (BLS) in computing its employment gures. Therefore, initially the unemployment rate is calculated as follows: Number of Unemployed People X 100 Number ofPeupIe in the IAbor Fame 20 m x 100 10% Unemployment Rate = Suppose a reduction in foreign demand for this economy's products causes an economic recessiona prolonged period of declining output. The following table offers two possible scenarios resulting from the recession. Calculate the unemployment rate associated with each scenario in the following table. Assume that each scenario describes the only labor market changes in this economy. Scenario Unemployment Rate A: Firms reduce work hours by 10%. The number of involuntary parttime workers rises % as rms respond to the reduction in the demand for their products by reducing the hours of each employed person from 40 to 36 hours per week. B: Firms reduce employment by 10%. The number of unemployed workers rises as firms % respond to the reduction in the demand for their products by laying off 18 previously employed workers