What is the denominator of the unemployment rate?

The labour force, which is employment plus unemployment, excluding full-time students, retirees and homemakers.

Why can the rate rise when people stop looking for work?

Leaving the labour force shrinks the denominator, so the same number unemployed gives a higher rate.

S4 Economics Unemployment, Paper 3: rates, participation and the cost of unemployment

2026-11-02

Tutor Prep Guide · Primary English

The unemployment rate divides by the labour force rather than the population, and participation uses the same base.

Focus　Write down the labour force first, then decide who is inside it and who has left.

01　Paper details (check answers afterwards)

Item	Detail
Questions	10
Suggested time	25
Difficulty mix	Foundation 4 · Intermediate 3 · Challenge 2 · Error redo 1
Chapter	Chapter: S4 Economics: Unemployment
Level	S4

02　Questions (10 items)

FoundationThe labour force is 4.8 million with 240 000 unemployed. Find the unemployment rate.
FoundationEmployment is 5.7 million and unemployment is 300 000. Find the unemployment rate.
FoundationThe working-age population is 6.4 million and the labour force is 4.0 million. Find the participation rate.
FoundationThe labour force is 800 000 and 40 000 are unemployed. Find the unemployment rate.
IntermediateThe labour force is 5.0 million and the unemployment rate is 6%. Find the number employed and unemployed.
IntermediateThe labour force is 4.12 million with 240 000 unemployed. If 120 000 discouraged workers leave the labour force, what happens to the rate?
IntermediateThe working-age population is 7.5 million, participation is 64% and unemployment is 4%. Find the number unemployed.
ChallengeThe labour force is 4.0 million and unemployment rises from 5% to 7%. Find the increase in the number unemployed.
ChallengeThe labour force is 5.0 million and unemployment rises from 5.5% to 8.0%. Find the extra unemployed, and the output loss if each percentage point costs 2% of output.
Error redoEmployment is 4.5 million and unemployment is 500 000. A student divides 50 by 450 and answers 11.1%. Find the correct rate.

03　Answers and one-line notes

#	Answer	One-line note
1	5%	24 over 480 is 5%.
2	5%	The labour force is 6.0 million, and 30 over 600 is 5%.
3	62.5%	400 over 640 is 62.5%.
4	5%	4 over 80 is 5%.
5	300 000 unemployed and 4.7 million employed	500 times 6% is 30, leaving 470 as employed.
6	It rises from about 5.83% to 6.00%	24 over 412 is 5.83%; once the labour force falls to 4.0 million, 24 over 400 is 6.00%.
7	192 000	750 times 0.64 is 4.8 million in the labour force, and 4% of that is 192 000.
8	80 000	The rate rises 2 percentage points, and 2% of 4.0 million is 80 000.
9	125 000 and 5% of output	The gap is 2.5 percentage points, so 2.5% of the 5.0 million force is 125 000 extra unemployed, and 2.5 times 2% is 5%.
10	10%	The denominator is the 5.0 million labour force, so 50 over 500 is 10%.

04　What to do after marking

After marking, redo only the wrong items and write down which step went wrong (formula, unit, or misread number).
Repeat the same item two days later; move to the next paper only when both attempts are correct.
Parents only need the answer and note columns; there is no need to explain every item.

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