**Explaining Challenges in Determining the Exact Unemployment Rate in a Country**Measuring the exact rate of unemployment in a country can often be challenging. Here are two key reasons that contribute to this difficulty:1. **Informal Economy:** - Many individuals work in the informal economy, which includes jobs that are not regulated by the government and often not included in official statistics. - These can include street vendors, freelancers, or those engaged in casual labor. As these jobs are not officially recorded, it becomes difficult to account for everyone who is employed or unemployed accurately.2. **Underreporting and Misreporting:** - People may underreport or misreport their employment status for various reasons. For instance, some may not register themselves as unemployed because they are discouraged workers who have stopped looking for jobs. - Additionally, individuals might be working part-time or on a contractual basis and not declare it, leading to inaccuracies in data collection.Understanding these factors helps in comprehending the complexities involved in calculating precise unemployment rates. Accurate measurement necessitates accounting for these hidden aspects of the labor market.

Determining the precise cost of unemployment in a country can be a challenging task due to various…

Answered: Explain two reasons why it might be…

Business

Economics

Explain two reasons why it might be difficult at times to determine the exact rate of unemployment in a country

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Give your opinion to this statement: The problem of unemployment can only be solved by opening as…

A: Unemployment is a situation in which a person who is willing and able (capable) to work do not find…

Q: Are the following workers more likely to experience short-term or long-term unemployment? Explain.…

A: Part d) When a new restuurant opens , short order cook experiences short term unemployment because…

Q: Can frictional unemployment by itself explain the fact that the late 2010s saw more job openings…

A: ▪︎Frictional unemployment emerges when individuals are looking for new positions and quit their past…

Q: When the following events happen, does the unemployment rate rise, fall, or stay the same? Briefly…

A: The unemployment rate is the proportion of employed people who are also unemployed in a given…

Q: Explain each of the four types of unemployment

A: Unemployment refers to the state of being without a job and actively seeking employment. It is a…

Q: Calculate the unemployment rate based on the following information: Working-age population: 219…

A: Unemployment is an economic problem that occurs when people who are able and willing to work fail to…

Q: what happens to the natural rate of unemployment response to the following events? Explain 1. the…

A: The normal pace of joblessness addresses the least joblessness rate by which expansion is steady or…

Q: For a number of reasons, economists believe that the natural rate of unemployment in the U.S.…

A: The Natural rate of unemployment refers to the unemployment rate that exists in the healthy and…

Q: Since 1960 there has been a substantial increase in unemployment rates in major European countries.…

A: The unemployment refers to the phenomenon in which the people who are willing to work at the…

Q: What is meant by the full employment or the natural rate of unemployment? Which type of unemployment…

A: In an economy, unemployment refers to the situation when labor supplied exceeds labor demand in the…

Q: Describe why this is so.

A: Frictional unemployment is caused when people are switching their jobs and it depends on the age…

Q: Suppose employment is 139 million and unemployment is 9 million. Also, each month an average of 1.2…

A: To find the average number of unemployed people per month, we need to first find the average inflow…

Q: Why shouldn’t every adult without a job be classified as part of the official unemployment rate?…

A: Unemployment rate: The unemployment rate is a useful indication of underutilization of the labor…

Q: Jake is a full-time worker. Today, he is fired from his job, and he suddenly decides to retire. Due…

A: Here, jr is given that that an lost his job and become unemployed, but at the same time, he decides…

Q: Find the relative change in unemployment from January 2005 to December of 2015.

A: Relative change in the unemployment rate from January 2005 to December 2015 can be calculated by…

Q: How can seasonal unemployment be alleviated? Should it be alleviated? Why or why not?

A: Seasonal unemployment means a situation when individuals are not having jobs(unemployed) at…

Q: Is it feasible for both the number of employed individuals in the economy and the unemployment rate…

A: Total Labor Force consists of both employed and unemployed. Unemployment Rate = Total Unemployed /…

Question

**Explaining Challenges in Determining the Exact Unemployment Rate in a Country**

Measuring the exact rate of unemployment in a country can often be challenging. Here are two key reasons that contribute to this difficulty:

1. **Informal Economy:**
- Many individuals work in the informal economy, which includes jobs that are not regulated by the government and often not included in official statistics.
- These can include street vendors, freelancers, or those engaged in casual labor. As these jobs are not officially recorded, it becomes difficult to account for everyone who is employed or unemployed accurately.

2. **Underreporting and Misreporting:**
- People may underreport or misreport their employment status for various reasons. For instance, some may not register themselves as unemployed because they are discouraged workers who have stopped looking for jobs.
- Additionally, individuals might be working part-time or on a contractual basis and not declare it, leading to inaccuracies in data collection.

Understanding these factors helps in comprehending the complexities involved in calculating precise unemployment rates. Accurate measurement necessitates accounting for these hidden aspects of the labor market.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Explanation

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Suppose that in an economy, the rate of job separation is 0.01 per month and the rate of job finding is 0.08 per month. Given these numbers, what is the natural rate of unemployment?
Through the basic equation of the labor market (L = E + U), prove that in a steady state the open unemployment rate is inversely proportional to the ratio of the number of people who get a new job (f) to the person who lost their job(s)!
The U.S. unemployment rate increased from 4.6% in July 2001 to 5.9% by June 2002. Without studying the subject in any detail, would you expect that a change of this kind is more likely to be due to cyclical unemployment or a change in the natural rate of unemployment? Why?
During which period is inflation and unemployment inversely related?
How do structural unemployment characteristics affect the natural rate of unemployment?
Describe the natural rate of unemployment
How is YOUR ability to create & manager YOUR Wealth will impact you, your family, your community, and the world.
What is the current unemployment rate and the labor force participation rate?
what is the effect of an increase in unemployment benefits on the equilibrium levels of real wage and unemployment.
Explain how frictional unemployment can be good for the economy.
Explain the difference between the natural rate of unemployment and the actual rate of unemployment as reported by the US Department of Labor.
When the actual unemployment rate is likely to fall below the natural rate of unemployment, we can expect that