Question

8. The Labor Department announces that the unemployment rate has fallen. Which of the following is(are) a clear conclusion(s)?

1. The economy created additional jobs last month
2. The economy expanded last month
3. Potential GDP expanded last month
4. The economy contracted last month
5. The labor force contracted last month
6. None of the above

F

Can someone please explain why the answer is NONE OF THE ABOVE

Answer 1

ans- f) none of the above

a) this is not a clear conclusion beacause it might happen that lesser number of people graduated last month/ or were willing to work last month

b) this can never be a conclusion based on only one factor (fall in unemployment). Other factors should also be considered like per capita consumption, national income etc.

c) fall in unemployment does not indicate that the GDP expanded last month, there might be other factors which can pull the GDP down

d) same reason as for option b)

e) contracted labor force generally leads to a fall in unemployment rate but vice versa might not be true. Hence this cannot be a clear conclusion for decrease in unemployment.