Related to the Economics in Practice on p.580: If extending the duration of unemployment benefits does discourage unemployed workers from looking for jobs,then ceteris paribus,

Question

Quizplus · Accepted Answer

If extending the duration of unemployment benefits discourages job search, then the incentive for unemployed workers to find jobs decreases, leading to a higher unemployment rate. Therefore, the best choice is A. The unemployment rate may decrease if there are other factors that positively affect the job market, but this is not explained in the given scenario. Discouraged workers may or may not increase, depending on the labor force participation rate. The natural rate of unemployment, which is the prevailing rate of unemployment in the absence of cyclical fluctuations, is not directly affected by the extension of unemployment benefits.

Related to the Economics in Practice on P