Which of the following is an economic cost of rising unemployment rates?

Question

Quizplus · Accepted Answer

Rising unemployment rates lead to a decrease in overall production and consumption, resulting in a fall in GDP.

Answer: B
 Rising unemployment rates can signal a decrease in the economy's potential output, leading to a shift inward in the production possibility frontier, which limits the country's capacity for economic growth.

Answer: C and D are incorrect.
 A fall in the amount of unemployment benefits paid by the government and an increase in income levels due to unemployment benefits are not economic costs of rising unemployment rates; rather, they are policy responses to mitigate the negative effects of unemployment.

Which of the Following Is an Economic Cost of Rising