Question

Which of the following cause the unemployment rate as measured by the Labor Statistics Department to overstate the true extent of joblessness?

A. unemployed persons falsely report themselves to be actively looking for a job
B. inflation
C. counting people as employed who are working part time, although they would prefer to be working full time
D. discouraged workers

Answer 1

The correct answer is option A.

Step-by-step explanation:

The bureau of labor statistics works under the department of labor. It collects information regarding, unemployment rate, types of employment, etc. It provides monthly data on the unemployment rate.

The BLS considers people who are jobless, actively looking for work and available for work as unemployed. Those people who are jobless and not actively looking for work are considered discouraged workers. These workers are not included in the labor force.

The unemployment rate is calculated as the ratio of a number of unemployed workers to the total labor force.

In the survey by BLS, some discouraged workers falsely report themselves as actively looking for work even when they are not. These workers get included in unemployed workers and the total labor force. This causes the unemployment rate to be overstated.