(BBA)

(BBA226-Macroeconomics)
(Fall2023)
------------------------------------------------------------------------------------------------
NAME OF STUDENTS :
STUDENTS ROLL NO& BATCH :
DR OM PRAKASH BOHRA
NAME OF FACULTY:
 Group Discussion-2 ( 28-10-2023) ( 3%)
Question-1 (1 mark)
In the following case, what happens to the u-rate?
(a) If Samir lost his job and begins looking for a new job
(b) Ahmed who has been out of work since his factory closed last year, becomes
discouraged and give up looking for work.

the unemployment rate (u-rate) will increase.

Samir's job loss will directly contribute to the increase in the u-rate. When an individual becomes unemployed and
actively seeks a new job, they are considered part of the labor force. Since Samir is now part of the labor force and
unemployed, the u-rate will rise.

Ahmed's situation, on the other hand, is slightly different. Since he has been out of work for an extended period and
has given up searching for a new job, he is no longer considered part of the labor force. As a result, his decision to
stop looking for work will not directly impact the u-rate.

However, it's important to note that Ahmed's discouragement and subsequent withdrawal from the labor force reflect
a broader issue of long-term unemployment and its impact on individuals' willingness to seek employment. This
phenomenon, known as labor discouragement, can indirectly contribute to a higher u-rate over time, as it reduces the
overall labor force participation rate.

Question-2 ( 2 mark)
Compute the followings:

(a) Labor force,

(b) u-rate,
(c) adult population, and
(d) abor force participation rate using this data:

Adult population by group

Number of employed 140.5 million

Number of unemployed 14.5 million

Not in labor force 86.5 million

ANS 2

To compute the labor force, u-rate (unemployment rate), adult population, and labor force participation rate, you can
use the following formulas:

(a) Labor Force (LF):

LF = Number of Employed + Number of Unemployed
LF = 140.5 million + 14.5 million
2
LF = 155 million

(b) Unemployment Rate (u-rate):

u-rate = (Number of Unemployed / Labor Force) x 100
u-rate = (14.5 million / 155 million) x 100
u-rate ≈ 9.35%

(c) Adult Population (AP):

AP = Labor Force + Not in Labor Force
AP = 155 million + 86.5 million
AP = 241.5 million

(d) Labor Force Participation Rate (LFPR):

LFPR = (Labor Force / Adult Population) x 100
LFPR = (155 million / 241.5 million) x 100
LFPR ≈ 64.13%

So, based on the given data:

(a) The labor force is 155 million.
(b) The unemployment rate is approximately 9.35%.
(c) The adult population is 241.5 million.
(d) The labor force participation rate is approximately 64.13%.