Question

The unemployment rate may overestimate the true extent of unemployment if:

1. many part-time employees would like to work fulltime, but are unable to get the additional work.
2. many people who claim to be unemployed actually work in the underground economy.
3. people falsely claim that they are actively seeking work in order to receive unemployment benefits.
4. either B) or C) occurs.

Answer 1

Answer: 4. If either B or C occurs

Explanation: Unemployment is the total number of people who are not engaged in active employment and are willing and capable of working,it is usually represented in percentage of the entire Population. Unemployment can be over estimated when people who claim to be unemployed are actually employed in the underground Economy(unreported employments from legal work) and sometime people claim to be actively seeking for employment because they want to keep enjoying unemployment benefits and Compensation.