Question 2

In May 2019, the population of a small economy was 270 million and the outside labour force

population was 126 million. There were 144 million people in the labor force and 120 million of

them were considered employment.

In July 2019, 2 million people were laid off due to the weak economy. Out of these people,

0.5 million decided to retire.

Based on the given information:

a) Calculate the unemployment rate in May 2019. (2 Marks)

b) Calculate the participation rate in May 2019 (2 Marks)

c) Calculate the number of people in the labour force in July 2019. (2 Marks)

d) Calculate the number of unemployed in July 2019 (2 Marks)

e) Calculate the unemployment rate in July 2019. (2 Marks)

f) Is it possible to eliminate unemployment. (1 Marks)

g) Explain THREE (3) causes of the unemployment rate with examples. (9 Marks)