Which of the following best explains the unemployment rate in Mexico?

• A. It is found by subtracting the labor force participation rate from 100.
• B. It is measured by the total population divided by the number of employed individuals.
• C. It is determined by the number of people not seeking work divided by the working-age population.
• D. It is calculated as the number of unemployed individuals divided by the labor force, then multiplied by 100.

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the definition of the unemployment rate. It measures the percentage of the labor force that is unemployed but actively seeking work.
2. Step 2: Identify the labor force, which includes all employed individuals plus those unemployed individuals who are actively looking for a job.
3. Step 3: Recognize that the unemployment rate is calculated by dividing the number of unemployed individuals by the total labor force.
4. Step 4: Express this relationship mathematically as: \(\text{Unemployment Rate} = \left( \frac{\text{Number of Unemployed}}{\text{Labor Force}} \right) \times 100\) to convert it into a percentage.
5. Step 5: Note why the other options are incorrect: subtracting labor force participation rate from 100 does not give unemployment rate; dividing total population by employed individuals is unrelated; and dividing those not seeking work by working-age population measures inactivity, not unemployment.