Some people who are employed or who are not making serious effort to find employment will report themselves as unemployed.Some people who want to find work will be counted as out of the labor force.
A)Both the first and the second fact tend to make the reported unemployment rate lower than the actual unemployment rate.
B)Both the first and the second fact tend to make the reported unemployment rate higher than the actual unemployment rate.
C)The first fact tends to make the reported unemployment rate higher than the actual unemployment rate.The second fact tends to make the reported unemployment rate lower than the actual rate.
D)The first fact tends to make the reported unemployment rate lower than the actual unemployment rate.The second fact tends to make the reported unemployment rate higher than the actual rate.

Question

Quizplus · Accepted Answer

The first fact inflates the unemployment rate by including those not actively seeking work. The second fact deflates it by excluding those who want work but are not counted as part of the labor force.

Some People Who Are Employed or Who Are Not Making