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

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, how would the labour statistics change?

A) The unemployment rate and the labour-force participation rate would be higher.
B) The unemployment rate and the labour-force participation rate would be lower.
C) The unemployment rate would be higher, and the labour-force participation rate would be lower.
D) The unemployment rate would be lower, and the labour-force participation rate would be unaffected.