How can unemployment benefits lead to a rise in the unemployment rate?

Income Inequality MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

PPSCFPSCNTSPakistan govt jobs
Subject
Income Inequalityeconomics-mcqs › income-inequality
Published
1 Jun 2019
Last updated
28 May 2026

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Explanation

Unemployment benefits can increase the unemployment rate because they reduce the costs involved in searching for a new job, making it easier for individuals to remain unemployed while looking for work.

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