Suppose that an economy has 9 million people working full-time. It also has 1 million people who are actively seeking work but currently unemployed as well as 2 million discouraged workers who have given up looking for work and are currently unemployed. What is this economy’s unemployment rate?

The unemployment rate refers to the rate, which may be denoted in terms of the percentage of the workers who are unemployed within a total labor force.

Explanation:

Unemployment rate = (unemployed / Labor force) * 100

= (10,00,000 / (90,00,000 + 10,00,000)) * 100

= (10,00,000 / 1,00,00,000) * 100

= 10%

Therefore, the unemployment rate is 10%