The Unemployment Rate May Underestimate the True Extent of Unemployment

question 108

Multiple Choice

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

• A)​many part-time employees would like to work full-time, but are unable to get the additional work.
• B)​employees increase the number of hours they work overtime.
• C)​there are a large number of people working in the underground economy.
• D)​any of the above occur.

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Definitions:

Consumption

The use of goods and services by households.

Fiscal Policy

Government policies related to taxation and spending to influence the economy.

Federal Government's Powers

The specific authorities granted to the federal government of a country, often outlined in its constitution, to manage national affairs and governance.

Discretionary Fiscal Policy

Government policy actions, such as changes in taxation and spending, deliberately undertaken to influence economic activity and stabilize the economy.