In November 2009,the United States was in a deep recession.To help keep the economy afloat,the government extended the period of time one could receive unemployment insurance to 99 weeks.This policy had an unintended consequence because:
A) workers searched for jobs for longer, which reduced the unemployment rate.
B) many workers quit their jobs so they could receive unemployment insurance.
C) workers spent more time searching for the perfect job, which increased frictional unemployment.
D) employers were more hesitant to fire workers, which reduced the unemployment rate.
E) employers were more hesitant to fire workers, which increased the unemployment rate.

Question

Quizplus · Accepted Answer

By extending the period of time one could receive unemployment insurance to 99 weeks, workers were able to spend more time searching for the perfect job, which increased frictional unemployment. This means that workers were more willing to wait for a job that better matched their skills and preferences, leading to an increase in frictional unemployment. However, this did not necessarily reduce the overall unemployment rate.

In November 2009,the United States Was in a Deep Recession