Quiz 20: Unemployment and Its Natural Rate

Business

Unemployment rate: Table-1 presents the division of population in 6 different categories. Table-1 img The work force will be considered as employed those who worked as paid employees, worked in their own business, or worked in business owned by family member. Both full-time and part-time workers belong to this category. Unemployed category work force is those who are willing to work and trying to get job during last four weeks. In Table-1, only 20 persons are in this category. Hence, the number of unemployed work force is img persons. Thus, the option 'b' is correct.

a. Total adult population: Total adult population can be calculated by adding adult employed, adult unemployed and adult not included in the labor force. This is given below. img Hence, the total adult population is img . b. Total labor force: Total labor force can be calculated by adding adult employed and adult unemployed. This is given below. img Hence, the labor force is img . c. Labor force participation: Calculation of the labor force participation is given below: img The labor force participation is img percent. d. Unemployment rate: Calculation of the unemployment rate is given below: img The unemployment rate is img percent.

Bureau of Labor Statistics (BLS) is a part of the Department of Labor which conducts regular surveys on the basis of which, the BLS has divided people who are adults into three categories: Employed : People working in all sectors who are able to earn their livelihood are included in this category. Whether paid or unpaid, full-time or part-time, on leave or not on leave are included in this category. Unemployed : People who are available for work but are not getting work to earn their livelihood fall into this category. People who are laid off and are expecting a call from their employer are also included in this category. Not in the labor force : People who are neither employed or unemployed are included in this category. People like full-time students, homemakers or retirees are included in this category. According to BLS, Labor force: It is defined as the summation of employed and unemployed people. img Unemployment rate : It is defined as the percentage of the labor force that is unemployed. img Labor- force participation rate : It is defined as the percentage of total adult population of the country that is in the labor force. img