- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 11. Understanding Business Cycles
- Subject 6. Unemployment
CFA Practice Question
Suppose in the nation of Utopia there are 2,000 people over 16 years old. Out of these 2,000 people, 1,500 are employed, 100 are unemployed and looking for work, and 400 are unemployed and are not looking for work. The unemployment rate in Utopia is ______.
Correct Answer: 6.25%
The labor force is composed of the employed (1,500) and the unemployed but looking for work (100). The unemployment rate is 100/1,600 = 0.0625 or 6.25%.
User Contributed Comments 3
| User | Comment |
|---|---|
| azramirza | 400..would come under discourage workers and hence it becomes a part of working age population? right? |
| DonAnd | The main criteria for unemployed is W/o work but has made specific efforts to find a job. The 400 is not looking for work so is neither employed nor unemployed. |
| choas69 | working age population consist of labor force and discouraged workers. those 400 left the labor force to be discouraged workers |