Chapter 12, Problem 1MCQ

To determine

The question requires us to determine the person who is considered unemployed.

Explanation of Solution

People are considered unemployed if they are not working currently but actively looking for a job. The unemployment rate is the ratio of the number of unemployed people to the labor force in an economy.

  $\text{Unemployment}\text{rate = }\frac{\text{Number}\text{of}\text{unemployed}\text{people}}{\text{Labor}\text{force}}\text{×100}$

Where the labor force is the sum of employed and unemployed people in an economy.

So, people who are available for work but not working and are actively seeking work are considered unemployed.

Option “e” is correct.

The other options are incorrect because

1. Not every unemployed people need to have unemployment insurance.
2. A person who works more than 30 hours a week is considered employed as either a full-time worker or part-time based on the nature of work.
3. A person who is not actively looking for a job for one or more years is not considered unemployed.
4. A person who wants to have a job, but is not actively looking for a job is not considered unemployed.