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   Economics
    Topic Weight: 10%




© Pristine
This Presentation has been prepared to provide general information about the
Company to whom it is addressed. This Presentation does not purport to contain all
the information. The information provided in this presentation is meant only for
the recipient and is not to be shared with anyone else.
Unemployment & Labor Market Indicator

                                                              Total Population

Work-Age Population (>16 years)




                                                                Labor Force


                   Employed




                                  Employed
   Unemployment Rate 
                                 Labor Force
                                           Employed
   Employment to Population Rate 
                                     Working Age Population
                                         Labor Force
   Labor Force Participation Rate 
                                    Working Age Population

Pristine   www.edupristine.com                                                   2
Concept Checker
                             Number of Unemployed            20,000
                                 Number of Employed          50,000
              Number of People actively seeking employment   10,000
                                 People (age > 16 years)     120,000


        Then unemployment rate is:
       A. 33.34%
       B. 40%
       C. 16.67%




Pristine   www.edupristine.com                                         3
Answer
       A
        A person who is not working is considered to be unemployed person if he is
       available to work and
           • Has actively searched for work in the last four weeks
           • Has been laid off from a job and is waiting to be recalled
           • Will start a new job in next 30 days
        Number of unemployed = 20,000
        Labor Force = Number of people either employed or actively seeking employment
       = 50,000 +10,000 =60,000
        Unemployment Rate = (Number of Unemployed/Labor Force)
       = (20,000/60,000) x100 = 33.34%




Pristine   www.edupristine.com                                                           4

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CFA Economics

  • 1. www.edupristine.com Economics Topic Weight: 10% © Pristine This Presentation has been prepared to provide general information about the Company to whom it is addressed. This Presentation does not purport to contain all the information. The information provided in this presentation is meant only for the recipient and is not to be shared with anyone else.
  • 2. Unemployment & Labor Market Indicator Total Population Work-Age Population (>16 years) Labor Force Employed Employed Unemployment Rate  Labor Force Employed Employment to Population Rate  Working Age Population Labor Force Labor Force Participation Rate  Working Age Population Pristine www.edupristine.com 2
  • 3. Concept Checker Number of Unemployed 20,000 Number of Employed 50,000 Number of People actively seeking employment 10,000 People (age > 16 years) 120,000  Then unemployment rate is: A. 33.34% B. 40% C. 16.67% Pristine www.edupristine.com 3
  • 4. Answer A  A person who is not working is considered to be unemployed person if he is available to work and • Has actively searched for work in the last four weeks • Has been laid off from a job and is waiting to be recalled • Will start a new job in next 30 days  Number of unemployed = 20,000  Labor Force = Number of people either employed or actively seeking employment = 50,000 +10,000 =60,000  Unemployment Rate = (Number of Unemployed/Labor Force) = (20,000/60,000) x100 = 33.34% Pristine www.edupristine.com 4