The unemployment rate calculation

B

The rate of unemployment is the percent of persons in the labor force who are unemployed. It is calculated as: number of persons unemployed divided by the number of persons in the labor force.

The correct answer is B. The unemployment rate equals the number of persons unemployed divided by the number in the labor force.

The unemployment rate is a measure used to assess the health of the labor market and to understand the level of joblessness within an economy. It is calculated by dividing the number of people who are unemployed by the number of people in the labor force and multiplying the result by 100 to express it as a percentage.

Let's break down the components of the answer options to understand why option B is the correct choice:

A. Unemployed divided by the population age 16 and over: This option considers the ratio of unemployed individuals to the total population aged 16 and over. However, the total population includes people who may not be part of the labor force, such as retirees, students, and those who are not actively seeking employment. Therefore, this option does not accurately reflect the unemployment rate.

B. Unemployed divided by the number in the labor force: This option correctly calculates the unemployment rate by considering the ratio of unemployed individuals to the number of people in the labor force. The labor force includes individuals who are employed or actively seeking employment. It excludes those who are not working and not seeking employment, such as retirees or individuals who have given up searching for jobs. Dividing the number of unemployed individuals by the labor force provides a more accurate measure of the unemployment rate.

C. Not working divided by the population age 16 and over: This option considers the ratio of individuals who are not working to the total population aged 16 and over. Similar to option A, this measure includes individuals who are not part of the labor force, making it an inaccurate representation of the unemployment rate.

D. Unemployed divided by the number employed: This option incorrectly compares the number of unemployed individuals to the number of employed individuals. This calculation does not provide an accurate assessment of the overall unemployment rate as it does not take into account the size of the labor force.

In summary, option B, unemployed divided by the number in the labor force, provides the most accurate calculation of the unemployment rate as it focuses on the ratio of unemployed individuals to the individuals who are either employed or actively seeking employment.