Final answer:
Increasing unemployment insurance can increase frictional unemployment because workers may take more time in their job search, leading to longer unemployment periods. Discouraged workers leaving the labor force might result in a lower unemployment rate even without an increase in job availability. The natural rate of unemployment is unlikely to remain constant due to various changing factors over time.
Step-by-step explanation:
If the government increases the amount of unemployment insurance that unemployed workers can collect, the amount of frictional unemployment would be expected to increase (B). Frictional unemployment is a form of temporary unemployment that occurs when workers are between jobs or are looking for their first jobs. It often involves a worker leaving a job voluntarily to find a better one.
Higher levels of unemployment insurance can provide more financial security to those seeking new employment, potentially allowing them to take more time in their job search. While this might increase the quality of the job match, it can also lead to longer periods of unemployment. Hence, with increased unemployment benefits, workers may be less pressured to take the first available job, possibly leading to an increase in frictional unemployment.
A change in unemployment benefits can also impact the unemployment rate. If many workers become discouraged from looking for jobs, they may exit the workforce, leading to a decrease in the unemployment rate even if the actual number of jobs does not increase.
Regarding the natural rate of unemployment, which includes frictional unemployment, it is unlikely to remain the same within one country over the long run due to changes in technology, demographic shifts, policy changes, and other factors that can affect job availability and workers' attitudes and behaviors towards job searching.