Many economists argue that the unemployment rate tends to understate the actual amount of unemployment. Why?
A) The unemployment rate excludes persons who work in the service sector.
B) The unemployment rate excludes persons who are unable to find work.
C) The unemployment rate excludes persons who want to work but have given up looking for a job.
D) The unemployment rate excludes workers who are also students.

Question

Quizplus · Accepted Answer

The unemployment rate only measures those individuals who are actively seeking employment but are unable to find it. It does not include those who have given up looking for work but still want a job. Therefore, the actual amount of unemployment may be higher than what is reported through the unemployment rate.

Many Economists Argue That the Unemployment Rate Tends to Understate