When an unemployed person drops out of the labor force, the unemployment rate

When an unemployed person drops out of the labor force, the unemployment rate


A. becomes more reliable as all the potential erroneous data are removed.
B. understates the true degree of joblessness in the economy.
C. overstates the true degree of joblessness in the economy.
D. is not affected by the existence of such workers.


Answer: B. understates the true degree of joblessness in the economy.


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