Question

8.00 Category Millions total population 310 population 16 and above 250 employed 192 unemployed structurally unemployed 4.00 frictionally unemployed 2.00 unemployed more 27 weeks or more 2.00 marginally attached workers discouraged workers 1.00 workers who are part time but want full time 2.00 0.10

Answer 1

Part A

To calculate the natural rate of unemployment, we first add structural and frictional unemployment and divide this value with the total labor force. The labor force is the summation of employed and unemployed.

$=\frac{4+2}{192+8}=\frac{6}{200}=0.03$

Part B

The U-6 unemployment rate is calculated by adding total number of unemployed plus marginally attached worker and divide this value with the summation of labor force and marginally attached workers.

$=\frac{8+2}{200+2}=\frac{10}{202}=0.0495=4.95\%$