Answer:
(a) 3.7
(b) 3.7
Explanation:
The unemployment rate is calculated as the ration of unemployed workers over the labor force. The labor force is the total number of employed plus unemployed workers:
[tex]Unemployment\,Rate=\frac{Unemployed\,Workers}{Labor\,Force}=\frac{Unemployed\,Workers}{Employed\,Workers+Unemployed\,Workers}[/tex]
Then if there were 155 million people in the labor force and 7.4% where unemployed that means that 11.47 million people where unemployed
[tex]0.074=\frac{Unemployed\,Workers}{155}[/tex]
[tex]Unemployed\,Workers=0.074*155=11.47[/tex]
If unemployment rate would have been 5% we have
[tex]Unemployed\,Workers=0.05*155=7.75[/tex]
That means that 3.72 million fewer unemployed workers. Since Labor Force is the sum of unemployed and employed workers. The reduction in unemployment implies that they were now employed .
