Chapter 13, Problem 2CTQ

To determine

The reason why many economists perceive a tradeoff between short term stabilization benefits of unemployment compensation and a contribution to higher unemployment rate in the long run

Concept introduction:

Unemployment Compensation:Unemployment compensation is the payments to the unemployed who have lost their job. It is the main source of income for unemployed people until they find a job. Unemployment compensation is also known as unemployment insurance or unemployment benefits.

Trade off: Trade off means that if you want to get something for yourself, you must sacrifice the other option. In Economics tradeoff is often related to opportunity cost.