Suppose the Australian government introduces a new generous unemployment benefit policy. Under this policy, those who last their jobs will receive unemployment payments equal to 85 percent of their previou wage for 12 months. How would this policy affect the unemployment rate in Australia? O Unemployment rate will increase due to higher structural unemployment O Unemployment rate will increase due to higher frictional unemployment O Unemployment rate will decrease as workers feel more financially secure in the event of job losses O Changes in unemployment benefits policies have no impact on the unemployment rate.

Suppose the Australian government introduces a new generous unemployment benefit policy. Under this policy, those who last their jobs will receive unemployment payments equal to 85 percent of their previou wage for 12 months. How would this policy affect the unemployment rate in Australia? O Unemployment rate will increase due to higher structural unemployment O Unemployment rate will increase due to higher frictional unemployment O Unemployment rate will decrease as workers feel more financially secure in the event of job losses O Changes in unemployment benefits policies have no impact on the unemployment rate.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations

Section: Chapter Questions

Problem 7P

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