At the beginning of each month, companies report to the federal government their net loss or gain in jobs over the pa...

Irina on September 3, 2019

@Marissa-Avnaim,

The passage tells us that the companies report their net loss or gain of jobs over the past month, and the government publishes the total numbers. The number of jobs lost is significantly underestimated in the recent recession despite accurate reporting by companies and correct tallying by the government.

Which of the following helps to resolve the paradox?

(A) More jobs are lost in recession than in a period of growth.

Incorrect. This fact is irrelevant, the argument tells us that the reporting is accurate but the true numbers are higher. The fact that more jobs are lost in recession alone is insufficient to explain why these lost jobs are underreported.

(B) The expenses of collecting and reporting data have steadily increased.

Incorrect. This fact is irrelevant. The argument tells us that the reporting is accurate regardless of how expensive it is.

(C) More people who lose their jobs start up their own businesses.

Incorrect. This fact would suggest that the job loss numbers are actually overstated because if these people start up their own businesses and create jobs, then net loss of jobs is lower than if these people stayed unemployed.

(D) In the recent recession a large number of companies abruptly ceased their operations.

Correct. This fact that a large number of companies abruptly ceased their operations during the recession suggests that accurate reporting - or any government reporting - was probably not on the top of their list before they went bankrupt/ closed down. Since the government never collected reports from these failing companies that had to lay off all of their employees, the resulting jobs lost numbers are significantly understated.

(E) The recent recession contributed to the preponderance of service jobs over manufacturing jobs.

Incorrect. This fact is irrelevant to the conclusion, we are only interested in net job numbers not the breakdown of manufacturing/ service jobs.

Does this make sense?

Let me know if you have any further questions.