Skip to content

CA Foundation · Business Economics · Indian Economy

In a district, the working-age population is 50,000. Of them, 30,000 are in the labour force, of whom 27,000 are employed. What are the labour force participation rate and the unemployment rate respectively?

The participation rate is 60% and the unemployment rate is 10%. Labour force 30,000 divided by working-age population 50,000 gives 60%. Unemployed are 3,000, and dividing by the labour force of 30,000 gives 10%, not by the total population.

  1. A60% and 10%Correct
  2. B60% and 6%
  3. C54% and 10%
  4. D54% and 6%

Explanation

Participation rate = 30,000/50,000 = 60%. Unemployed = 30,000 - 27,000 = 3,000; unemployment rate = 3,000/30,000 = 10%. Using 50,000 as the base for unemployment gives 6%, a wrong base. Using employed/population gives 54% for participation, which ignores the unemployed.

Did you get it right without looking?

One question tells you little. A timed set on Indian Economy shows your real accuracy, how long you take and where you lose marks.

Practise Indian EconomyFree diagnostic mock

More Indian Economy questions