When There Is an Increase in the Duration of Unemployment

question 43

Multiple Choice

When there is an increase in the duration of unemployment, the U.S. Congress typically responds by

• A) lowering income taxes.
• B) extending unemployment benefits.
• C) encouraging unemployed U.S. workers to seek employment overseas.
• D) redefining "unemployed" so the unemployment rate does not look so bad.

---

Definitions:

Major Business Projects

Significant initiatives undertaken by businesses that involve considerable investment and are aimed at achieving specific strategic goals.

Prospect Theory

A theory in behavioral economics that evaluates how people choose between probabilistic alternatives that involve risk, where the probable outcomes are known.

Diminishing Marginal Utility

The principle that as a consumer increases the consumption of a good or service, the marginal utility obtained from each additional unit of the good or service decreases.

Loss Averse

The tendency of individuals to prefer avoiding losses to acquiring equivalent gains, a fundamental behavior observed in economic and financial decision-making.