Final answer:
EI does not directly increase any specific type of unemployment, but it can have an impact on cyclical unemployment. By providing financial support to unemployed individuals, EI helps stimulate demand for goods and services, which can encourage businesses to hire more workers.
Step-by-step explanation:
EI (Employment Insurance) does not directly increase any specific type of unemployment. However, it can have an impact on cyclical unemployment, which is the type of unemployment that occurs due to changes in the business cycle or economic downturns.
During periods of economic recession or slowdown, many people may lose their jobs due to decreased demand for goods and services. When these individuals become unemployed, they may be eligible to receive EI benefits, which provide them with financial assistance while they search for new employment.
By providing financial support to unemployed individuals, EI can help alleviate the negative consequences of cyclical unemployment by helping individuals meet their basic needs and maintain their purchasing power. This can help stimulate demand for goods and services, which in turn can encourage businesses to hire more workers and reduce the level of unemployment.