What is the term for the proportion of the working population who are either at work or actively seeking work?

• A. Unemployment
• B. Participation rate
• C. Frictional unemployment
• D. Labour Force

Answer: (B)

Think about the fraction of people of working age who are in the labor market. This is measured by the labour force participation rate—the proportion of the working-age population that is either employed or actively seeking work. It’s a percentage, not a count, and it tells you how many people are choosing to participate in work.

Unemployment refers to the share of the labour force that is not employed but is actively looking for work, while frictional unemployment is a type caused by short-term job searches. The labour force itself is the total number of people in the market, not the proportion of the population in it. So the term that matches the description is the participation rate.