Which of the following contributed to the rise in the natural rate of unemployment in Europe?
A) generous benefits to the unemployed
B) restrictions on employers that made it more difficult to fire workers.
C) the average incomes of Europeans increased during the 1990s.
D) A and B are correct.

Question

Quizplus · Accepted Answer

Generous benefits to the unemployed (A) led to less pressure on workers to find new jobs quickly, and restrictions on employers (B) meant that they were less likely to hire new workers or to let go of existing employees, both of which contributed to a higher natural rate of unemployment in Europe. The increase in average incomes (C) would likely have had the opposite effect, as higher incomes generally lead to greater demand for labor and a lower natural rate of unemployment.

Which of the Following Contributed to the Rise in the Natural