How does the presence of an underground labor market bias the government's calculation of the labor force participation rate?
A) The official government statistic on labor force participation is too low because people working in the underground labor market should be counted as being in the labor market and employed.
B) The official government statistic on labor force participation is too high because people working in the underground labor market should be counted as being in the labor market but unemployed.
C) The official government statistic on labor force participation is too low because people working in the underground labor market should not be counted as being in the labor market.
D) The official government statistic on labor force participation is too high because people working in the underground labor market should not be counted as being in the labor market.
E) The official government statistic on labor force participation is identical to actual labor market participation whether or not there is an underground labor market.
Correct Answer:
Verified
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