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- Subject
- Labour Marketeconomics-mcqs › labour-market
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
If unemployment benefits were so high that they provided laid-off employees with 95% of their usual wages, what would likely happen to the official unemployment rate?
Multiple choice question for Labour Market. Select an option, then review the explanation below.
Explanation
When unemployment benefits are very generous, many individuals might remain classified as unemployed even if they are not actively seeking work, causing the official unemployment rate to overstate the real unemployment situation.
More Labour Market MCQs
Practice related questions from the same subject.
- 1.How do unions typically contribute to widening the wage gap between union members and non-union workers?
- 2.Under which circumstance can unions enhance efficiency?
- 3.Which of the following reasons explains why companies might choose to pay efficiency wages?
- 4.Which of the following government actions is least likely to decrease the unemployment rate?
- 5.What happens if the wage rate is set above the competitive equilibrium wage for any reason?