ECONOMICS
TECHNOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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understates the true unemployment rate
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overstates the true unemployment rate
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correctly measures the true unemployment rate
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doubles the unemployment rate
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Detailed explanation-1: -The unemployment rate can also understate the true level of unemploy-ment because it doesn’t include the number of frustrated workers who no longer look for jobs, also known as discouraged workers.
Detailed explanation-2: -More specifically, discouraged workers have not actively looked for work in the last four weeks; therefore, they are not counted as unemployed. U.S. Bureau of Labor Statistics.
Detailed explanation-3: -Answer and Explanation: Unemployment is generally underestimated as compared to its true extent when some people cease seeking a job if there are unable to get it in a specific time period, and these people are known as discouraged workers.
Detailed explanation-4: -It may surprise you that discouraged workers are not counted as unemployed and are excluded when calculating the unemployment rate. A discouraged worker is not a part of the labor force of an economy.