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Fill in the blanks with appropriate options given in below.
The official unemployment rate and the U-4 measure of labor underutilization are two different measures of joblessness in the economy.
_________ discouraged workers from the official unemployment rate may cause the official rate to __________ the true extent of underemployment.
Options:
1. Excluding
2. Including
3. Overstate
4. Understate

Answer :

jafruevu

Answer:

1. Excluding and 4. Understate

Explanation:

We know,

Unemployment rate = Unemployed people ÷ Total labor force

Here, the total labor force includes total employed and unemployed people minus out of the labor force and discouraged workers. Discouraged workers are those who either do not want to do the job because of a lack of a suitable position or do not look for a job. However, the U-4 measure of labor under-utilization includes the discouraged worker in the labor force.

Therefore, excluding discouraged workers from the official unemployment rate would understate the true extent of the official rate of underemployment.

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