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Elle croyait que sa belle-sœur était au chômage.

Elle croyait que sa belle-sœur était au chômage.
She believed that her sister-in-law was unemployed.
From Lesson 181:Reported speech: present to imperfect·French

Questions & Answers about Elle croyait que sa belle-sœur était au chômage.

Why is était in the imparfait here instead of the present tense?
This is the sequence of tenses at work. If she were speaking her thought aloud, she would say, Ma belle-sœur est au chômage (My sister-in-law is unemployed - Present tense). Because the main verb reporting the thought (croyait) is in the past, the present tense est must shift back to the imparfait était.
Why is the first verb croyait in the imparfait and not the passé composé (a cru)?
We use the imparfait for verbs like croire (to believe) and penser (to think) when describing an ongoing state of mind in the past. It sets the background context of what she was believing at that time, rather than describing a single, suddenly completed action.
Why do we say au chômage rather than using an adjective for "unemployed"?
In French, unemployment is usually expressed with the noun le chômage. Instead of using an adjective like in English, French uses the phrase être au chômage, which literally translates to "to be at the unemployment."
Does belle-sœur only mean "sister-in-law"?
It can actually mean two things! The prefix beau- or belle- is used for both in-laws and step-relatives. Depending on the context, une belle-sœur could be a sister-in-law or a stepsister.

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