Question

What are the effects of extending the period unemployed workers are eligible for unemployment benefits?

1)Decreases cyclical unemployment and increases the labor force participation rate
2)Increases frictional unemployment and increases the unemployment rate
3)Increases structural unemployment and increases the unemployment rate
4)Decreases frictional unemployment and increases the unemployment rate

Answer 1

2)Increases frictional unemployment and increases the unemployment rate

Step-by-step explanation:

unemplyment rate will increase, beacuse the benefactor are unemployed, who are seeking for job, if the period is extendedpeople who may stop looking a job will continue his search, thereforethe unemployeed used in the calculation of the rate will be higher.

It will increase frictional unemployment. Because people will be looking for jobs better suit for their skill for longer time, instead of looking in different areas or lower-wages job.