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21 Feb 2020, 04:30
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Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
35%
(medium)
Question Stats:
69% (01:40) correct
31%
(01:44)
wrong
based on 600
sessions
History
Date
Time
Result
Not Attempted Yet
At the beginning of each month, companies report to the federal government their net loss or gain in jobs over the past month. These reports are then consolidated by the government and reported as the total gain or loss for the past month. Despite accurate reporting by companies and correct tallying by the government, the number of jobs lost was significantly underestimated in the recent recession.
Which one of the following, if true, contributes most to a resolution of the apparent discrepancy described?
(A) More jobs are lost in a recession than in a period of growth.
(B) The expenses of collecting and reporting employment data have steadily increased.
(C) Many people who lose their jobs start up their own businesses.
(D) In the recent recession a large number of failing companies abruptly ceased all operations.
(E) The recent recession contributed to the growing preponderance of service jobs over manufacturing jobs.
Which one of the following, if true, contributes most to a resolution of the apparent discrepancy described?
(A) More jobs are lost in a recession than in a period of growth.
(B) The expenses of collecting and reporting employment data have steadily increased.
(C) Many people who lose their jobs start up their own businesses.
(D) In the recent recession a large number of failing companies abruptly ceased all operations.
(E) The recent recession contributed to the growing preponderance of service jobs over manufacturing jobs.
22 Feb 2020, 04:00
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Pre-thinking:
Companies report number of jobs lost or gained monthly. Government tallies it up to assess total gain or loss in jobs for the past month. Despite this happening correctly, number of jobs lost was underestimated.
We are required to resolve this apparent paradox. We are, therefore, looking for an explanation that involves actual jobs lost not being reported (since the tallying by the government is stated to be correct).
Let us examine the options:
(A) More jobs are lost in a recession than in a period of growth. Does not explain how the lost jobs were not reported. Eliminate.
(B) The expenses of collecting and reporting employment data have steadily increased. Does not explain how lost jobs were not reported. Eliminate.
(C) Many people who lose their jobs start up their own businesses. These people would have to report the jobs in their own companies, including their own. Hence, this does not explain how the lost jobs were not reported. Eliminate.
(D) In the recent recession a large number of failing companies abruptly ceased all operations. Correct. If the companies ceased operations, all the jobs in such companies would be "lost", but since the companies do not exist anymore, they would not be reporting the lost jobs to the government, resulting in an underestimation of the number of jobs lost.
(E) The recent recession contributed to the growing preponderance of service jobs over manufacturing jobs. Does not explain how the lost jobs were not reported. Eliminate.
Hope this helps.
Companies report number of jobs lost or gained monthly. Government tallies it up to assess total gain or loss in jobs for the past month. Despite this happening correctly, number of jobs lost was underestimated.
We are required to resolve this apparent paradox. We are, therefore, looking for an explanation that involves actual jobs lost not being reported (since the tallying by the government is stated to be correct).
Let us examine the options:
(A) More jobs are lost in a recession than in a period of growth. Does not explain how the lost jobs were not reported. Eliminate.
(B) The expenses of collecting and reporting employment data have steadily increased. Does not explain how lost jobs were not reported. Eliminate.
(C) Many people who lose their jobs start up their own businesses. These people would have to report the jobs in their own companies, including their own. Hence, this does not explain how the lost jobs were not reported. Eliminate.
(D) In the recent recession a large number of failing companies abruptly ceased all operations. Correct. If the companies ceased operations, all the jobs in such companies would be "lost", but since the companies do not exist anymore, they would not be reporting the lost jobs to the government, resulting in an underestimation of the number of jobs lost.
(E) The recent recession contributed to the growing preponderance of service jobs over manufacturing jobs. Does not explain how the lost jobs were not reported. Eliminate.
Hope this helps.
22 Jun 2020, 04:11
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CrackVerbalGMAT
But shouldn't the option (D) be giving more info. about when it ceased its operations? Like if the jobs were reported by 1st April and ceased the operations on 2nd April then there is no underestimation of jobs gain/loss?
22 Jun 2020, 23:08
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lakshya14
Hi Lakshya
The stimulus does not restrict the period of underestimation to any month - it only mentions a broad period, "recession".
Presumably, a recession can last several months, if not more. Therefore, if we consider the exact scenario that you have presented, a company reporting jobs on 01April and shutting down on 02 April would not result in any underestimation for the month of April. However, that company would not be reporting any job losses for the month of May, whereas all the jobs in that company would, in fact, be lost. This would result in an underestimation in the month May.
Similarly month on month. Since the stimulus does not restrict the scope of the underestimation to any month as such, this option does a good job of explaining the discrepancy.
Hope this helps.
