In the Two-Sided Search Model, an Increase in Employment Insurance

question 16

Multiple Choice

In the two-sided search model, an increase in Employment Insurance benefits makes labour search

• A) more attractive.
• B) equivalent to working.
• C) more difficult to monitor.
• D) unambiguously decrease.
• E) unambiguously increase.

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Definitions:

Subprime Loans

Subprime loans are offered to individuals with poor credit scores who are considered high-risk borrowers, typically featuring higher interest rates than prime loans.

Securitized

Refers to the process of pooling various types of debt—including mortgages, car loans, or credit card debt—and selling them as consolidated financial instruments to investors.

GAAP

Generally Accepted Accounting Principles, which are a set of rules and guidelines used to prepare and present financial statements in the U.S.

Collateralized Borrowing

A method of borrowing where the borrower pledges an asset as security or collateral for the loan, which the lender can claim if the loan is not repaid.