Transitions into and out of the labor force:
A) rarely occur.
B) do not affect unemployment statistics.
C) make unemployment statistics difficult to interpret.
D) reduce the amount of frictional unemployment.

Question

Quizplus · Accepted Answer

Transitions into and out of the labor force can make unemployment statistics difficult to interpret because individuals who are not working and actively searching for a job may be classified as "out of the labor force" rather than unemployed. Conversely, individuals who were previously out of the labor force but become employed may not be captured in the unemployment statistics. This can lead to an underestimation of the true level of unemployment in the economy.

Transitions into and Out of the Labor Force