EFG Company experienced a reduced demand for its products during a recession.EFG managers were considering laying off some workers when the personnel director said,"Let's not lay off these workers.If we do,our unemployment insurance premiums will increase.The state considers employment stability when determining our premium." Considering the firm's employment record when determining the rate to charge for unemployment insurance is called

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The practice of considering a firm's employment record when determining the rate to charge for unemployment insurance is called experience rating. This is because the premiums are based on the company's experience with unemployment and its ability to maintain stable employment levels.

EFG Company Experienced a Reduced Demand for Its Products During