All else equal, which of the following would increase the unemployment rate?
(i) an increase in the number of women who return to work after being stay-at-home mothers
(ii) a preference among older men to retire early
(iii) an increase in the maximum number of weeks for which someone can receive government unemployment benefits
(iv) an increase in the number of previously unemployed women who stop looking for work and become discouraged workers

Question

jhanley2036 jhanley2036

03-09-2019
Business

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All else equal, which of the following would increase the unemployment rate?
(i) an increase in the number of women who return to work after being stay-at-home mothers
(ii) a preference among older men to retire early
(iii) an increase in the maximum number of weeks for which someone can receive government unemployment benefits
(iv) an increase in the number of previously unemployed women who stop looking for work and become discouraged workers

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Answer:

The correct answer is option (ii) and (iii).

Explanation:

The unemployment rate will obviously increase with the increase in the number of people who are unemployed.

If there's an increased preference among older men to retire early, this may lead to an increase in the unemployment rate.

If there is an increase in the unemployment benefits or increase in the period in which the government provides benefits to the unemployed workers, it will lead to an increase in the unemployment rate. This is because the incentive will reduce the cost of unemployment.