How does a recession-induced unemployment period impact a worker's income?

Show Answers

It raises both the worker's current earnings and their long-term income expectations.It lowers the worker's present earnings but may not change their expected lifetime income.It has no effect on either the worker's current or anticipated income.It decreases the worker's anticipated lifetime income but leaves current earnings unchanged.It causes an immediate increase in current income but decreases future income.

Explanation

Option A is correct because during a recession, unemployment can sometimes lead to increased current income through mechanisms like unemployment benefits or government stimulus, which may also raise the worker's permanent income expectations. Other options incorrectly describe the impact on current and permanent income.