Question 6 Consider the frictional model of an unemployed worker who in each period receives wage offers drawn from a pr

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Question 6 Consider The Frictional Model Of An Unemployed Worker Who In Each Period Receives Wage Offers Drawn From A Pr 1 (103.89 KiB) Viewed 44 times

Question 6 Consider the frictional model of an unemployed worker who in each period receives wage offers drawn from a probability distribution. An increase in the level of unemployment benefits A)[ ] raises the reservation wage by reducing the opportunity cost of waiting for better wage offers. B)[ ] reduces the reservation wage by increasing the opportunity cost of waiting for better wage offers. C)[ ] raises the reservation wage by reducing the future gain of waiting for better wage offers. D)[ ] reduces the reservation wage by increasing the future gain of waiting for better wage of- fers. E)[ ] A and C. F)[ ] None of the above.