Suppose that all social programs simultaneously become more generous. In particular suppose thatthere is an increase in UI benefits of $500, and also an increase in welfare benefits of $500, whichare represented in the two-sided search model as payments to everyone who is not in the labor force.What will be the effects on• the unemployment rate, U ,• the vacancy rate, v,• the labor force, Q,• the number of firms, A,• aggregate output, Y , and• labor market tightness, j ≡ A/Q?
Suppose that all social programs simultaneously become more generous. In particular suppose thatthere is an increase in UI benefits of $500, and also an increase in welfare benefits of $500, whichare represented in the two-sided search model as payments to everyone who is not in the labor force.What will be the effects on• the unemployment rate, U ,• the vacancy rate, v,• the labor force, Q,• the number of firms, A,• aggregate output, Y , and• labor market tightness, j ≡ A/Q?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Suppose that all social programs simultaneously become more generous. In particular suppose that
there is an increase in UI benefits of $500, and also an increase in welfare benefits of $500, which
are represented in the two-sided search model as payments to everyone who is not in the labor force.
What will be the effects on
• theunemployment rate, U ,
• the vacancy rate, v,
• the labor force, Q,
• the number of firms, A,
•aggregate output , Y , and
• labor market tightness, j ≡ A/Q?
there is an increase in UI benefits of $500, and also an increase in welfare benefits of $500, which
are represented in the two-sided search model as payments to everyone who is not in the labor force.
What will be the effects on
• the
• the vacancy rate, v,
• the labor force, Q,
• the number of firms, A,
•
• labor market tightness, j ≡ A/Q?
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