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Suppose the Working-Age Population Is 150 Million, the Labor Force

question 249

Essay

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?


Definitions:

Payroll Tax

Levies placed on either employees or employers, often determined as a percentage of the wages that staff receive from employers.

Payroll Taxes

Taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff.

Government Transfer Expenditure

Government spending on programs that provide benefits to individuals or families without requiring direct payment or labor in return, such as social security or unemployment benefits.

Social Security Program

A government program designed to provide financial support to individuals during retirement, disability, or other conditions that affect income.

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