Question

15. Compared to offering no unemployment benefits, the unemployment insurance system of the United States probably

a. leads to longer spells of unemployment.

b. decreases the unemployment rate.

c. leads to lower post-unemployment wages.

d. provides for a lower standard of living while unemployed.

Answer 1

Unemployment insurance is a benefit system of the United States for those who lost their job and actively looking for employment. This benefit increases the benefit of unemployment compared to no benefit. Due to this insurance, those who are unemployed receive a steady income during their unemployment spell. So they decrease their search for unemployment. This, in turn, increases the spells of unemployment.

Therefore, the correct option is: A