Answer the Question on the Basis of the Following Information $\mathbf { 8 0 }$

question 89

Multiple Choice

Answer the question on the basis of the following information about a hypothetical economy: Full-Time Employed = $\mathbf { 8 0 }$
Part-Time Employed = 25
Unemployed $= 15$
Discouraged Workers = 5
Members of Underground Economy = 6
Consumer Price Index $= 110$ Refer to the given information.If the members of the underground economy are presently counted as part of the unemployed when in fact they are employed,the official unemployment rate is overstated by about:

• A) 0 percentage points.
• B) 2 percentage points.
• C) 5 percentage points.
• D) 6 percentage points.

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Definitions:

Cash Payments Journal

A financial journal that records all cash outflows or payments made by a business.

Subsidiary Ledger

A ledger containing all the details of a general ledger account, allowing for more detailed information and analysis of that account.

Cash Receipts Journal

A specialized accounting journal used to record all cash inflow transactions.

General Ledger

A comprehensive accounting record of all transactions of a company, detailed by accounts.