Canadian Securities Course (CSC) Level 1 Test 2025 – 400 Free Practice Questions to Pass the Exam

The unemployment rate measures the proportion of the labor force that is unemployed but actively seeking employment. The correct formula is derived from dividing the number of individuals who are not currently working but are seeking work by the total labor force, which consists of both the employed and the unemployed individuals.

Labor force is defined as the sum of both those who are employed and those who are unemployed but are actively seeking employment. By expressing this relationship as a percentage (by multiplying by 100), you derive the unemployment rate. This metric provides insights into the economy's performance and labor market dynamics.

The other options do not accurately represent the definition of the unemployment rate. They either include people not seeking work, the employed population, or the total population, all of which are not the standard measures for calculating the unemployment rate. Such distinctions are crucial when assessing labor market conditions.