Question

if there are 120,000 people in the labor force for a particular town, and the number of people who are unemployed there is 12,000, what is the unemployment rate?

a. 20%

b. 11%

c. 10%

d. 16%

Explanation:

Step1: Recall unemployment rate formula

Unemployment rate = $\frac{\text{Number of unemployed}}{\text{Labor - force}}\times100\%$

Step2: Substitute given values

Number of unemployed = 12000, Labor - force = 120000. So, Unemployment rate = $\frac{12000}{120000}\times100\%$

Step3: Calculate the result

$\frac{12000}{120000}\times100\% = 0.1\times100\%=10\%$

Answer:

C. 10%