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Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985

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BuyFindarrow_forward

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985
Textbook Problem

The main policy goal of the unemployment insurance system is to reduce the

a. search effort of the unemployed.

b. income uncertainty that workers face.

c. role of unions in wage setting.

d. amount of frictional unemployment.

To determine

The policy goal of unemployment insurance system.

Explanation

Option (b):

The main policy goal of unemployment insurance system is to reduce the income uncertainty of workers. This unemployment insurance program offers partial protection to income uncertainty of workers. If the worker is unemployed, the unemployment insurance system will pay the benefit to them. Thus, the option “b” is correct.

Option (a):

The policy goal of unemployment insurance system is to reduce the income uncertainty of workers not to reduce the search effort of the employed. If suddenly a worker loses his job, the unemployment insurance system will pay the benefit and it is not to reduce the search effort...

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