If government decides to provide generous unemployment benefits,it is likely to ________.
A) decrease the rate of unemployment in an economy
B) decrease consumption expenditure in the current period
C) increase the motivation to look for a job
D) increase the duration of unemployment

Question

Quizplus · Accepted Answer

Providing generous unemployment benefits can lead to an increase in the duration of unemployment as job seekers may be less motivated to actively search for employment. This is because they can receive a relatively high income from unemployment benefits without having to work. Additionally, this may also lead to an increase in taxes as the government would need to fund the unemployment benefits program.

If Government Decides to Provide Generous Unemployment Benefits,it Is Likely