Practice Quiz

Praxis II: Economics Content Knowledge Exam Prep

Category - Economics

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The mayor of Hiramville is looking at some startling statistics about his city. The labor force in Hiramville is 400,000 and there are currently 100,000 people who are unemployed. What is the unemployment rate, expressed as a percentage, in Hiramville?
  1. .25%
  2. 2.5%
  3. 25%
  4. 10%
Explanation
Answer - C - The unemployment rate in Hiramville is 25%.

Key Takeaway: It is a very good idea to memorize many of the key macroeconomics equations before you take the exam. The unemployment rate can be found by simply dividing the number of unemployed people by the entire labor force. The resulting number should be expressed as a percentage (not a decimal). In this case, divide the unemployed (100,000) by the labor force (400,000) = .25 or 25%.
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