The natural rate of unemployment:
A) would increase if a larger percentage of the labor force were over 25 years old.
B) would increase if union membership fell.
C) would increase if unemployment benefits were increased.
D) will always remain fixed.

Question

Quizplus · Accepted Answer

The natural rate of unemployment would increase if unemployment benefits were increased because higher benefits could reduce the incentive for unemployed individuals to seek and accept jobs, potentially leading to longer periods of unemployment.

The Natural Rate of Unemployment