The unemployment rate measures what fraction of the population?

The unemployment rate is calculated as the fraction of the labor force that is not currently employed but is actively seeking work. The labor force includes individuals who are employed and those who are unemployed (but available for and seeking work). This definition is crucial because it highlights that the unemployment rate does not account for the entire population, but specifically for those who are part of the labor force.

Answering correctly requires an understanding of the distinction between the entire population and the labor force. Those not part of the labor force, such as retirees, students, or discouraged workers who have stopped looking for jobs, are not included in the unemployment rate calculation. Therefore, option B correctly identifies that the unemployment rate reflects the proportion of individuals within the labor force who are unemployed, rather than the total population or any specific subset of unemployed individuals.