Author Question: The government of Eduland provided generous unemployment benefits to all the unemployed workers. ... (Read 59 times)

drink · **on:** Jun 29, 2018

The government of Eduland provided generous unemployment benefits to all the unemployed workers. 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 spent daily by unemployed workers in looking for jobs. This suggests that ________ exists in the labor market in Eduland. A) the problem of moral hazard
B) a tragedy of the commons
C) a pecuniary externality
D) a positive externality

Question 2

Economic growth in Cuba has been slow; what can best explain the slow growth?

A) Lack of economic resources
B) Lack of incentive mechanisms and economic freedom
C) Labor productivity is low.
D) A non-democratic form of government
E) Too much competition within the economy