Suppose That Some People Report Themselves as Unemployed When,in Fact,they

question 17

Multiple Choice

Suppose that some people report themselves as unemployed when,in fact,they are working in the underground economy.If these persons were counted as employed,then

• A)both the unemployment rate and labor-force participation rate would be higher.
• B)both the unemployment rate and labor-force participation rate would be lower.
• C)the unemployment rate would be higher,and the labor-force participation rate would be higher.
• D)the unemployment rate would be lower,and the labor-force participation rate would be unaffected.

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Definitions:

Understate Assets

The incorrect reporting of asset values on the balance sheet, making them appear lower than their actual worth.

Total Assets

The sum of all resources owned by a company, valued in financial terms, and listed on the balance sheet.

Total Expenses

The sum of all costs and expenses incurred by a business or individual in a specific period.

Prepaid Rent Expense

An account that represents rent payments made in advance for a future period; classified as a current asset on the balance sheet.