Suppose canada has a population of 30 million people and a labor force participation rate of 2/3. furthermore, suppose the natural rate of unemployment in canada is 7%. if the current number of unemployed people is 2 million people, what can we conclude about canada’s economy?

the unemployment rate is above the natural rate of unemployment

Explanation:

The unemployment rate may be defined as the percent of the unemployed people in a total labor force. Workers may be considered as unemployed when they do not work currently, but they are willing to work and are able to do so.

The total labor force of a country includes all the employed as well as the  unemployed people within the economy.

The natural rate of unemployment is defined as the unemployment rate which  exist in a growing economy.

In the context, total population is given = 30 million

Labor force participation rate = 2/3.

Therefore, labor force = 2/3 of 30 million

                                    = 20 million people

The natural rate of unemployment in Canada is given = 7%

The current unemployed people is = 2 million

Therefore, unemployment rate =  (unemployed people/total labor force) x 100

                                                    = (2/20) x 100

                                                     = 10 %

Thus

natural rate of unemployment in Canada is 7%

unemployment rate is 10%

From here we can see that the unemployemnet rate is higher than the natural rate of unemployment in Canada.

Hence the answer is ---

the unemployment rate is above the natural rate of unemployment

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