AP Macroeconomics Question 286: Answer and Explanation

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Question: 286

5. For Question below use the following information for a small town:

What is the official unemployment rate?

  • A. 5 percent
  • B. 2.5 percent
  • C. 5.5 percent
  • D. 7 percent
  • E. Unknown, as we do not know the number of discouraged workers

Correct Answer: A


A —The unemployment rate is the ratio of unemployed to the total labor force. UR = U/LF = 50/1,000 = 5%.