Scenario: Consider Country a with a Population of 2 Million

question 141

Multiple Choice

Scenario: Consider Country A with a population of 2 million people. In Country A, there are 1.5 million people employed; 0.3 million younger than 18, in school or retired; 0.1 million voluntarily unemployed; and 0.1 million people officially unemployed.
-Refer to the scenario above.Suppose that,given the numbers in the initial scenario,20 percent of the people reported as officially unemployed are actually only looking for jobs with wages above the market clearing wage rate.What is the true unemployment rate,given this information?

• A) 4.5 percent
• B) 5.1 percent
• C) 6.25 percent
• D) 10 percent

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Definitions:

Normal Curve

A bell-shaped curve that represents the distribution of many types of naturally occurring data; synonymous with Gaussian distribution.

Normal Random Variable

A variable that is distributed in a way that fits the normal (Gaussian) distribution, characterized by its mean and standard deviation.

Mean

The average of a set of numerical values, calculated by adding them together and dividing by the number of values.

Standard Deviation

A measure that quantifies the amount of variation or dispersion of a set of data values from the mean.