In the US an increase in the world price of oil would likely
A)decrease unemployment, and the decrease would be greater the more generous unemployment insurance benefits were.
B)decrease unemployment, but the decrease would be smaller the more generous unemployment insurance benefits were.
C)increase unemployment, and the increase would be greater the more generous unemployment insurance benefits were.
D)increase unemployment, but the increase would be smaller the more generous unemployment insurance benefits were.

Question

Quizplus · Accepted Answer

An increase in the world price of oil can lead to higher production costs and reduced economic activity, potentially increasing unemployment. Generous unemployment benefits may prolong unemployment duration, leading to a greater increase in unemployment.

In the US an Increase in the World Price of Oil