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#10 - At the beginning of each month, companies report to

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Complete Question Explanation

Resolve the Paradox. The correct answer choice is (D)

The paradox here is that, despite accurate reporting and tallying of the jobs lost and gained by companies each month, the number of jobs lost during the recent recession was underestimated. We are looking for the cause of this underestimation, which needs to be some factor that was not considered by the government in creating the current reporting system. In other words, some lost jobs were not reported and to correctly answer this question, we need to figure out why.

Answer choice (A): While this is likely true, it does nothing to resolve the discrepancy. We are not trying to figure out why more total jobs were lost, we are trying to figure out why more jobs were lost than were reported to the federal government.

Answer choice (B): Since we have already been told that the figures were accurately reported and tallied, this answer choice has no possibility of resolving the discrepancy. It may be more expensive to collect and report the data, but based upon the information in the stimulus, those added expenses have not affected the overall figures.

Answer choice (C): If anything, this answer choice would serve to further confuse the issue, as those who started their own businesses may be considered to have a job, but may not yet be knowledgeable enough about the system to report their entrepreneurship as a gained job. Under such circumstances, the number of jobs lost would have been overestimated.

Answer choice (D): This is the correct answer choice. If a large number of companies ceased all operations during the current recession, surely one of the operations ceased would have been the reporting of job information to the federal government. Therefore, every single job lost when that company folded would not have been reported, leading to an underestimation of jobs lost.

Answer choice (E): No differentiation is made in the stimulus between service and manufacturing jobs. This stimulus involves total jobs, and therefore any shift from manufacturing to service positions would have no effect on the overall numbers.