What would we predict if a country increases its unemployment compensation?
A) The country would have shorter durations of each spell of unemployment, and it would have a higher unemployment.
B) The country would have shorter durations of each spell of unemployment, and it would have a lower unemployment rate
C) The country would have longer durations of each spell of unemployment, and it would have a higher unemployment rate.
D) The country would have longer durations of each spell of unemployment, and it would have a lower unemployment.

Question

Quizplus · Accepted Answer

Increasing unemployment compensation typically makes being unemployed less financially stressful, which can lead to individuals taking longer to find new employment, thus increasing both the duration of unemployment spells and the overall unemployment rate.

What Would We Predict If a Country Increases Its Unemployment