Which of the following causes the unemployment rate to understate the true extent of joblessness?
A)Many full-time workers really want to be part-time workers.
B)Persons who collect unemployment benefits report themselves to be searching for a job.
C)Discouraged workers are not counted as unemployed.
D)A drug dealer reports herself as unemployed.
E)Some people do not want to have a paid job.

Question

Quizplus · Accepted Answer

Discouraged workers are individuals who have given up looking for a job because they believe there are no suitable jobs available. Since they are not actively seeking a job, they are not counted as part of the labor force and therefore not considered unemployed. This means that the unemployment rate does not reflect the true extent of joblessness.

Which of the Following Causes the Unemployment Rate to Understate