Statement I: When the unemployment rate is 7% there is some cyclical unemployment.
Statement II: Most of the unemployed are collecting unemployment insurance benefits.

A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.

Question

Madison Phillips · Accepted Answer

Final Answer : A, Explanation :  Statement I is true because 7% unemployment rate indicates that the economy is not at full employment and there is still some cyclical unemployment (unemployment due to economic downturns).Statement II is false because most of the unemployed individuals do not collect unemployment insurance benefits. In some countries, only a portion of the unemployed are eligible for unemployment insurance benefits and even then, they may have exhausted their benefits or not filed a claim.

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