Question
The following information is to be used for calculations of the unemployment rate: Suppose there are two major groups, adults, and teenagers, with adults divided
The following information is to be used for calculations of the unemployment rate: Suppose there are two major groups, adults, and teenagers, with adults divided into men and women. Teenagers account for 10 percent of the labor force; adults account for 90 percent. Women make up 35 percent of the adult labor force. Suppose also that the unemployment rates for these groups are as follows: teenagers, 19 percent; men, 7 percent; women, 6 percent.
a. calculate the aggregate unemployment rate
b. What if the share of teenagers in the labor force increases from 10 to 15 percent. How will this affect the aggregate unemployment rate?
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