SOLUTIONS 1. Note a more detailed solution to question I was provided in another document. a. Official Unemployment rate \( =( \) Unemployed rate/Labour force) \( \times 100 \) \( =(5 / 103) \times 100=4.85 \% \) b. (i) True unemployment rate \( \begin{aligned} \text { (ii) Official unemployment rate } \\ \text { (iii) True unemployment rate is higher than the official unemployment rate because } \\ \text { discouraged workers are included in the labour force. }\end{aligned} \) \( \begin{aligned}(4 / 99) \times 103) \times 100=7.77 \%\end{aligned} \) c. i. True unemployment rate doesn't change because 7 million have only switched but they are still working. ii. The official unemployment rate \( =((5+3.5) /(91+5+3.5))^{*} 100 \) \( =(8.5 / 99.5) * 100 \)

The concept of unemployment has been around for centuries, making it a hot topic across various historical epochs. In ancient Rome, for example, unemployment existed due to the reliance on slave labor, causing free citizens to struggle for jobs. Fast forward to the Great Depression in the 1930s, when the unemployment rate soared to about 25%, sparking massive government intervention and social safety nets that we still refer to today. Understanding these historical contexts helps us appreciate contemporary labor economics better! Employment statistics aren't just numbers; they play a vital role in shaping national policies! Economists and policymakers use unemployment rates to gauge the health of the economy, informing decisions on fiscal and monetary policies. For instance, a rising unemployment rate may prompt central banks to lower interest rates to stimulate job creation. Moreover, businesses rely on these statistics to strategize hiring and wages, making it a crucial tool for economic planning. Remember, those numbers affect real lives!