Which formula is used to calculate a nation's unemployment rate?

• A. Unemployment Rate = (Labor Force / Population) × 100
• B. Unemployment Rate = (Number of Unemployed / Population) × 100
• C. Unemployment Rate = (Number of Unemployed / Labor Force) × 100
• D. Unemployment Rate = (Number of Employed / Labor Force) × 100

Answer: (C)

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 and actively seeking work.
2. Step 2: Identify the components involved: 'Number of Unemployed' refers to people without jobs but looking for work, and 'Labor Force' includes both employed and unemployed individuals actively participating in the job market.
3. Step 3: Recognize that the unemployment rate is calculated by dividing the number of unemployed people by the total labor force, not by the total population.
4. Step 4: Write the formula for the unemployment rate as: \(\text{Unemployment Rate} = \left( \frac{\text{Number of Unemployed}}{\text{Labor Force}} \right) \times 100\) to express it as a percentage.
5. Step 5: Confirm that other options are incorrect because they either divide by the total population or use the number of employed people, which do not correctly represent the unemployment rate.