An advantage of unemployment compensation is that because it is funded by a tax on employers,state unemployment funds are able to remain solvent during economic downturns.

Question

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State unemployment funds can become insolvent during economic downturns because the increased number of claims can deplete the funds faster than the tax on employers can replenish them, requiring states to borrow from the federal government or find other solutions to pay unemployment benefits.

An Advantage of Unemployment Compensation Is That Because It Is