IF Unemployment insurance were so generous that it paid laid off workers 95 percent of their regular salary?
AThe official unemployment rate would probably overstate true unemployment
BThere would be no impact on the official unemployment rate
CThe official unemployment rate would probably understate true unemployment
DFrictional Unemployment would fall
ENone of these answers
Correct answer
A. The official unemployment rate would probably overstate true unemployment
Explanation
The correct answer is The official unemployment rate would probably overstate true unemployment.