Question

b) Consumer confidence drops due to an increase in gas-price. 5. Consider the following table: (Write the formula and show your work for each calculation) Labor force 7506 7675 Real GDP 515.00 Year 2003 2004 2005 2006 U-Rate Potential % | GDP 515.00 13.55518.00 14.69 519.00 Output Gap (%) NA Unemployed Employed 6416 6635 1142 6630 | 1088 7822 527.00 Fill in the columns for labor force, unemployed, employed and unemployment rates. Present your calculations.

Answer 1

Labour Force = Employed + Unemployed

Unemployment rate = number of unemployed forces + labor force

Year	Labor Force	Unemployed	Employed	U-Rate %
2003	7506	1090	6416	14.52
2004	7675	1040	6635	13.55
2005	7772	1142	6630	14.69
2006	7822	1088	6734	13.91

number of unemployed persons in the year 2003 =  7506-6416 = 1090
number of unemployed persons in the year 2004 = 7675-6635 = 1040
total number of labor force in the year 2005 = 1142+6630 = 7772
number of employed persons in the year 2006 = 7822-1088 = 6734
the unemployment rate in the year 2003 = 1090/7506 = 14.52%
the unemployment rate in the year 2006 = 1088/7822 = 13.91%