Economics 13th Edition by James Gwartney, Richard Stroup, Russell Sobel, David Macpherson

Exercise 11

"When employees are dismissed from employment for reasons other than poor performance, unemployment benefits should replace 100 percent of their prior earnings while they are searching for a new job." Do you think this proposal is a good one? Why or why not? If instituted, would the policy influence how quickly laid-off workers would find new jobs? What impact would the policy have on the unemployment rate?