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AP Macroeconomics Mea 1 C a Define the Labor Force the Unemployment Rate and the Labor Force Participation Rate B Explain How Changes in Employment and Questions

Calculate unemployment and labor force participation rates, then explain how employment changes and discouraged workers affect each indicator.

Syllabus
Effective Fall 2022
Course
AP Macroeconomics

Exam points

  • classify people as employed, unemployed or outside the labor force from a scenario
  • calculate the labor force or number unemployed from population and rate data
  • calculate the unemployment rate using unemployed divided by the labor force
  • calculate the labor force participation rate using the working-age population
  • explain how discouraged workers and other status changes affect unemployment and participation rates

AP Macroeconomics Mea 1 C a Define the Labor Force the Unemployment Rate and the Labor Force Participation Rate B Explain How Changes in Employment and Questions question 1

[Maximum number: 3]

Assume that in the country of Zeta, the civilian noninstitutional population aged 16 and over is 1,000,000. The labor force participation rate is 70%, the unemployment rate is 9%, and the natural rate of unemployment is 5\%.

Question (a)

(a)

Calculate the number of people in Zeta that are unemployed. Show your work.

[ 1 ]

Question (b)

(b)

If some individuals who are counted as unemployed in Zeta looking for work, what will happen to each of the following?

[ 2 ]

Question (i)

(i)

The labor force participation rate. Explain.

[ 1 ]

Question (ii)

(ii)

The unemployment rate

Begin your response to this question at the top of a new page in the separate Free Response booklet and fill in the appropriate circle at the top of each page to indicate the question number.

[ 1 ]
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