What does unemployment rate measure?

• A. Total number of unemployed people.
• B. Measures the percentage of the population who want a job but cannot find one.
• C. Percentage of people employed.
• D. Average duration of unemployment.

Answer: (B)

Unemployment rate is a measure of how many people who want to work and are actively seeking work are unable to find a job, expressed as a percentage of the labor force. This captures the idea that it’s about those who are available and looking, not the entire population. The option that describes this as the percentage of the population who want a job but cannot find one best fits the concept, since it conveys both the desire for work and the difficulty in finding it, scaled to the size of the labor force. The other descriptions don’t fit: a raw count of unemployed isn’t a rate; the percentage employed is the opposite of unemployment; and the average duration of unemployment is a different metric.