Suppose that there is an increase in ei benefits and also


Suppose that there is an increase in EI benefits, and also an increase in welfare benefits (which is considered as another social program), that are represented in the DMP model as payments to everyone who is not in the labour force. What will be the effects on the unemployment rate, the vacancy rate, the labour force, the number of firms, aggregate output and labour market tightness? Show the changes using diagrams and also explain your results.

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Business Economics: Suppose that there is an increase in ei benefits and also
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