Use the table below to answer the following questions:

Labor Force of an Economy

Labor Force Number of People (millions)Employed 152.9 Structurally unemployed 4.8 Cyclically unemployed 4.9 Frictionally unemployed 2.7

Instructions:Round your answers totwo 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 1.5 million employed workers become [a(18)] unemployed, while 0.4 million [a(19)] unemployed workers find work. Calculate the unemployment rate and the natural rate of unemployment for this economy.

Actual rate of unemployment:%

Natural rate of unemployment:%