Economic Growth, Unemployment and Inflation: Question 10

Worked solution

Step 1: Recall the labour force survey definition of unemployment

The labour force survey classifies adults into three groups:

• Employed: currently working in a paid job.
• Unemployed: without a job, but willing and able to work and actively seeking work.
• Not in the labour force (economically inactive): not working and not currently seeking work. For example, full-time students not job-hunting, retired people, or people who have chosen not to seek paid work.

Being without a paid job is not, on its own, enough to be classed as unemployed. The person must also be available for and actively looking for work.

Step 2: Match each person to a category

• Priya (A): a full-time student who has not started job-hunting, not in the labour force.
• Marcus (B): retired and not seeking further work, not in the labour force.
• Levi (C): has no job, is available to start immediately, and is actively applying for jobs every week, meets all three conditions for unemployed.
• Farah (D): has chosen not to seek paid work while caring for her children, not in the labour force.

Step 3: Why the other options are wrong

• A (Priya): not actively seeking paid work, so she is economically inactive rather than unemployed.
• B (Marcus): has voluntarily left the labour force through retirement and is not seeking work, so he is economically inactive.
• D (Farah): is not currently seeking paid work, so she is economically inactive rather than unemployed, regardless of the reason for not seeking work.

Final answer

• Only Levi, who is available for and actively seeking work, is classified as unemployed, option C.