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Question : The term "unemployment rate" is defined as the number of unemployed individuals divided by the:

Option 1: Total population

Option 2: Labor force

Option 3: Working-age population

Option 4: Employed population


Team Careers360 16th Jan, 2024
Answer (1)
Team Careers360 24th Jan, 2024

Correct Answer: Labor force


Solution : The correct answer is (b) Labor force.

The unemployment rate is calculated by dividing the number of unemployed individuals by the labor force and multiplying the result by 100 to express it as a percentage. The labor force consists of individuals who are either employed or actively seeking employment.

The formula to calculate the unemployment rate is:

Unemployment Rate =(Number of Unemployed / Labor Force) × 100
The labor force includes both employed individuals and those who are unemployed but actively looking for work. It excludes individuals who are not in the labor force, such as retired individuals, students, homemakers, and individuals who have given up searching for a job and are no longer actively seeking employment.

By dividing the number of unemployed individuals by the labor force, the unemployment rate provides an indication of the proportion of the labor force that is currently without employment. It is an important economic indicator used to assess the health of the labor market and the level of joblessness in an economy.

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