The official unemployment rate is:
A)the number of unemployed people divided by the number of employed people.
B)the number of unemployed people divided by the total size of the population.
C)the number of unemployed people divided by the size of the non-institutionalized population.
D)the number of unemployed people divided by the size of the labor force.
E)the number of unemployed people divided by the size of the non-institutionalized population, age 16 or older.

Question

Quizplus · Accepted Answer

The official unemployment rate is the number of unemployed people divided by the size of the labor force. The labor force includes individuals who are employed or actively seeking employment. This is the most commonly used measure of unemployment by government agencies and economists. Choice A is incorrect because it divides the number of unemployed by the number of employed, resulting in a ratio that does not represent the unemployment rate. Choice B is incorrect because it divides the number of unemployed by the total population, which includes children and retirees who are not in the labor force. Choice C is similar to B, but it excludes institutionalized individuals who are also not in the labor force. Choice E is incorrect because it includes individuals under the age of 16 who are also not in the labor force.

The Official Unemployment Rate Is