The Government of Perinthia Provided Generous Unemployment Benefits to All

Multiple Choice

The government of Perinthia provided generous unemployment benefits to all unemployed workers in the country.However,the new government that came into power reduced the amount of unemployment insurance paid to each worker.This increased the average number of hours that unemployed workers spent daily looking for jobs.This suggests that ________ exists in the labor market in Perinthia.

A) the problem of moral hazard
B) the tragedy of the commons
C) a pecuniary externality
D) a positive externality