Suppose unemployment benefits are increased.Which of the following is the most likely outcome of the increase?

Question

Quizplus · Accepted Answer

When unemployment benefits are increased, the direct cost of being unemployed stays the same, and the need to accept the first available job after becoming unemployed is not affected. However, an increase in unemployment benefits may decrease the incentive for an unemployed person to look for work, as they may rely on the benefits instead of actively seeking employment. Therefore, option A is the most likely outcome of the increase. Option D is also a possibility, but it is not as likely as option A.

Suppose Unemployment Benefits Are Increased