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- Subject
- Labour Marketeconomics-mcqs › labour-market
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
Under which circumstance is the natural rate of unemployment expected to decrease?
Multiple choice question for Labour Market. Select an option, then review the explanation below.
Explanation
An increase in unemployment benefits can reduce the natural rate of unemployment by providing better support for job seekers, potentially encouraging more active job search and reducing frictional unemployment. In contrast, higher income taxes, more training, or increased geographical immobility typically have different or opposite effects.
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?