Question

A reduction in unemployment compensation will A. increase the amount of frictional unemployment. B. increase the...

A reduction in unemployment compensation will

A.

increase the amount of frictional unemployment.

B.

increase the amount of cyclical unemployment.

C.

not change the amount of frictional unemployment because unemployment compensation affects only structural unemployment.

D.

not change the amount of frictional unemployment because unemployment compensation affects only cyclical unemployment.

E.

decrease the amount of frictional unemployment.

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Answer #1

Reduction in the amount of unemployment compensation will decrease the amount of frictional unemployment as people would now go for jobs more as no unemployed will be given any assistance by the Govt.

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