Question 1

Which of the following is a criterion workers must meet to be eligible for unemployment benefits?

Accepted Answer

A)  They must have earned more than a minimum amount in the previous year. 
B)  They must be hourly wage,not salaried,workers. 
C)  They cannot have a 4-year college degree. 
D)  They must not have made a previous claim to receive unemployment benefits. 
A)  They must have earned more than a minimum amount in the previous year. 
B)  They must be hourly wage,not salaried,workers. 
C)  They cannot have a 4-year college degree. 
D)  They must not have made a previous claim to receive unemployment benefits.

Question 2

What is a potential advantage of a partial experience rating over a full experience rating of insurance?

Accepted Answer

A)  Moral hazard costs are lower with partial experience rating. 
B)  Adverse selection is less likely with partial experience rating. 
C)  It helps insure firms against downturns. 
D)  Partial experience rating is fairer to efficient firms. 
A)  Moral hazard costs are lower with partial experience rating. 
B)  Adverse selection is less likely with partial experience rating. 
C)  It helps insure firms against downturns. 
D)  Partial experience rating is fairer to efficient firms.

Question 3

Benefits under disability insurance are:

Accepted Answer

A)  taxed as regular income. 
B)  equal to the amount the individual would have received at the full-benefits age under Social Security. 
C)  equal to the amount the individual would have received at the early entitlement age under Social Security. 
D)  equal to two-thirds of the earnings made in the year prior to becoming disabled. 
A)  taxed as regular income. 
B)  equal to the amount the individual would have received at the full-benefits age under Social Security. 
C)  equal to the amount the individual would have received at the early entitlement age under Social Security. 
D)  equal to two-thirds of the earnings made in the year prior to becoming disabled.

Question 4

Empirical evidence on the moral hazard of unemployment insurance (UI)indicates that the:

Accepted Answer

A)  post-unemployment wages are higher when UI benefits last longer. 
B)  duration of unemployment is reduced when UI benefits are reduced. 
C)  duration of unemployment is increased when UI benefits are reduced. 
D)  number of workers who apply for UI benefits is reduced when the weekly benefit is higher. 
A)  post-unemployment wages are higher when UI benefits last longer. 
B)  duration of unemployment is reduced when UI benefits are reduced. 
C)  duration of unemployment is increased when UI benefits are reduced. 
D)  number of workers who apply for UI benefits is reduced when the weekly benefit is higher.

Question 5

How long do unemployment benefits last in the absence of a specific federal extension?

Accepted Answer

A)  The duration is determined using a formula based on the recipient's previous earnings. 
B)  12 weeks 
C)  26 weeks 
D)  52 weeks 
A)  The duration is determined using a formula based on the recipient's previous earnings. 
B)  12 weeks 
C)  26 weeks 
D)  52 weeks

Question 6

For which of the following are benefits levels set by the federal government?

Accepted Answer

A)  workers' compensation 
B)  unemployment insurance 
C)  disability insurance 
D)  private insurance 
A)  workers' compensation 
B)  unemployment insurance 
C)  disability insurance 
D)  private insurance

Question 7

The moral hazard of social insurance ________ as duration increases; the benefits to consumption smoothing __________ as duration increases.

Accepted Answer

A)  increases; increase 
B)  decreases; decrease 
C)  increases; decrease 
D)  decreases; increase 
A)  increases; increase 
B)  decreases; decrease 
C)  increases; decrease 
D)  decreases; increase

Question 8

At PrettyFlowers Nursery,the forklift driver runs into another employee,breaking her arm and leg.Under what circumstance will the injured worker receive workers' compensation?

Accepted Answer

A)  The injured worker will receive compensation if she is able to prove in court that the injury was a result of the forklift driver's negligence (perhaps caused by excessive staring at pretty flowers). 
B)  The injured worker will receive compensation if she is able to prove in court that the injury was a result of the firm's negligence (e.g.,in hiring a forklift driver with a tendency to stare at pretty flowers). 
C)  The injured worker will receive compensation if she is able to prove she was injured on the job. 
D)  The injured worker will receive compensation if she is able to prove that she could not have avoided the accident. 
A)  The injured worker will receive compensation if she is able to prove in court that the injury was a result of the forklift driver's negligence (perhaps caused by excessive staring at pretty flowers). 
B)  The injured worker will receive compensation if she is able to prove in court that the injury was a result of the firm's negligence (e.g.,in hiring a forklift driver with a tendency to stare at pretty flowers). 
C)  The injured worker will receive compensation if she is able to prove she was injured on the job. 
D)  The injured worker will receive compensation if she is able to prove that she could not have avoided the accident.

Question 9

Replacing unemployment insurance with mandated worker self-insurance accounts is potentially beneficial because:

Accepted Answer

A)  unemployment occurs primarily when workers are older,thus at a time when their self-insurance accounts would be sufficiently large. 
B)  moral hazard would be less than under a public unemployment insurance system. 
C)  adverse selection would be less than under a public unemployment insurance system. 
D)  both moral hazard and adverse selection would be unlikely to occur if workers self-insure. 
A)  unemployment occurs primarily when workers are older,thus at a time when their self-insurance accounts would be sufficiently large. 
B)  moral hazard would be less than under a public unemployment insurance system. 
C)  adverse selection would be less than under a public unemployment insurance system. 
D)  both moral hazard and adverse selection would be unlikely to occur if workers self-insure.

Question 10

Discuss the efforts to alleviate the hardship due to high unemployment during the recent recession.What type of a role did the extended unemployment compensation (EUC)of 2008,Unemployment Compensation Extension Act of 2010,and the Middle Class Tax Relief and Job Creation Act of 2012 play? What were the fundamental differences between the Democrats and Republicans regarding these pieces of legislation?

Accepted Answer

EUC program benefits lasted until Januar

Question 11

Which of the following is TRUE?

Accepted Answer

A)  Unemployment lasts longer for laid-off workers at firms with partially experience-rated insurance than for laid-off workers at firms whose insurance is fully experience-rated. 
B)  High-layoff firms tend to be more efficient than low-layoff firms. 
C)  Injured workers return to work sooner at firms with partially experience-rated insurance than do workers at firms with fully experience-rated insurance. 
D)  There is no empirical evidence that outcomes depend on whether or not unemployment or disability insurance programs are experience-rated. 
A)  Unemployment lasts longer for laid-off workers at firms with partially experience-rated insurance than for laid-off workers at firms whose insurance is fully experience-rated. 
B)  High-layoff firms tend to be more efficient than low-layoff firms. 
C)  Injured workers return to work sooner at firms with partially experience-rated insurance than do workers at firms with fully experience-rated insurance. 
D)  There is no empirical evidence that outcomes depend on whether or not unemployment or disability insurance programs are experience-rated.

Question 12

Which of the following is consistent with a moral hazard effect stemming from disability insurance?

Accepted Answer

A)  After the disability insurance program is started,labor force participation declines. 
B)  After the disability insurance program is started,labor force participation increases. 
C)  Disability applications rise during economic expansions. 
D)  A decrease in disability benefits causes the number of disability applications to increase. 
A)  After the disability insurance program is started,labor force participation declines. 
B)  After the disability insurance program is started,labor force participation increases. 
C)  Disability applications rise during economic expansions. 
D)  A decrease in disability benefits causes the number of disability applications to increase.

Question 13

Which of the following is TRUE about the unemployment benefit schedule?

Accepted Answer

A)  Benefit payments are fixed and do not depend on previous earnings. 
B)  Benefit payments are an increasing function of previous earnings,and every worker receives some benefit regardless of previous earnings. 
C)  Replacement rates are approximately the same for high- and low-income earners. 
D)  Unlike most other social insurance programs,the benefits received from unemployment insurance are taxed. 
A)  Benefit payments are fixed and do not depend on previous earnings. 
B)  Benefit payments are an increasing function of previous earnings,and every worker receives some benefit regardless of previous earnings. 
C)  Replacement rates are approximately the same for high- and low-income earners. 
D)  Unlike most other social insurance programs,the benefits received from unemployment insurance are taxed.

Question 14

The consumption-smoothing benefits of unemployment insurance are _________ those for disability insurance,and the negative behavioral responses to unemployment insurance are __________ those for disability insurance.

Accepted Answer

A)  larger than; larger than 
B)  smaller than; smaller than 
C)  smaller than; larger than 
D)  larger than; smaller than 
A)  larger than; larger than 
B)  smaller than; smaller than 
C)  smaller than; larger than 
D)  larger than; smaller than

Question 15

Suppose that the disability insurance (DI)program was changed so that individuals who want to receive DI must first go 10 months without working to demonstrate that they are truly disabled instead of the current 5 months.
(a)How would this change affect the moral hazard costs of DI?
(b)A critic of this change does some research and finds out that the acceptance rate (the share of those applying who are accepted into the program)of the DI program increased as a result of the change.He says that this is evidence that the change in the program has increased the moral hazard costs associated with workers' compensation.What do you think?

Accepted Answer

(a)By increasing the number of months ap

Question 16

Which of the following is equivalent to reforming the social insurance system to one of worker self-insurance?

Accepted Answer

A)  mandating that all insurance be fully experience-rated at the firm level 
B)  mandating that workers contribute a portion of their income to a savings account that could be tapped if they have an adverse event 
C)  eliminating the current insurance programs and mandating nothing to replace them 
D)  mandating that all firms provide access to insurance for workers in the event of disability or unemployment. 
A)  mandating that all insurance be fully experience-rated at the firm level 
B)  mandating that workers contribute a portion of their income to a savings account that could be tapped if they have an adverse event 
C)  eliminating the current insurance programs and mandating nothing to replace them 
D)  mandating that all firms provide access to insurance for workers in the event of disability or unemployment.

Question 17

Workers' compensation covers:

Accepted Answer

A)  job search costs. 
B)  medical costs associated with any injury incurred while employed. 
C)  medical costs associated with an injury incurred while at work. 
D)  cash payments to replace exactly half of a worker's lost wages during recuperation. 
A)  job search costs. 
B)  medical costs associated with any injury incurred while employed. 
C)  medical costs associated with an injury incurred while at work. 
D)  cash payments to replace exactly half of a worker's lost wages during recuperation.

Question 18

Currently,approximately _____ of unemployed workers receive unemployment insurance benefits.

Accepted Answer

A)  8.8% 
B)  23.1% 
C)  54.5% 
D)  67.3% 
A)  8.8% 
B)  23.1% 
C)  54.5% 
D)  67.3%

Question 19

Which of the following is TRUE regarding unemployment insurance?

Accepted Answer

A)  The federal government mandates that all 50 states administer the program. 
B)  The federal government mandates the benefit levels of the program. 
C)  It is only used to compensate workers whose jobs are moved overseas. 
D)  Benefits are automatically provided to all eligible workers. 
A)  The federal government mandates that all 50 states administer the program. 
B)  The federal government mandates the benefit levels of the program. 
C)  It is only used to compensate workers whose jobs are moved overseas. 
D)  Benefits are automatically provided to all eligible workers.

Exam 14: Unemployment Insurance, disability Insurance, and Workers Compensation

Which of the following is a criterion workers must meet to be eligible for unemployment benefits?

What is a potential advantage of a partial experience rating over a full experience rating of insurance?

Benefits under disability insurance are:

Empirical evidence on the moral hazard of unemployment insurance (UI)indicates that the:

How long do unemployment benefits last in the absence of a specific federal extension?

For which of the following are benefits levels set by the federal government?

The moral hazard of social insurance ________ as duration increases; the benefits to consumption smoothing __________ as duration increases.

At PrettyFlowers Nursery,the forklift driver runs into another employee,breaking her arm and leg.Under what circumstance will the injured worker receive workers' compensation?

Replacing unemployment insurance with mandated worker self-insurance accounts is potentially beneficial because:

Which of the following is TRUE?

Which of the following is consistent with a moral hazard effect stemming from disability insurance?

Which of the following is TRUE about the unemployment benefit schedule?

The consumption-smoothing benefits of unemployment insurance are _________ those for disability insurance,and the negative behavioral responses to unemployment insurance are __________ those for disability insurance.

Which of the following is equivalent to reforming the social insurance system to one of worker self-insurance?

Workers' compensation covers:

Currently,approximately _____ of unemployed workers receive unemployment insurance benefits.

Which of the following is TRUE regarding unemployment insurance?

Why Study Public Finance

Theoretical Tools of Public Finance

Empirical Tools of Public Finance

Budget Analysis and Deficit Financing

Externalities- Problems and Solutions

Externalities in Action- Environmental and Health Externalities

Public Goods

Cost-Benefit Analysis

Political Economy

State and Local Government Expenditures

Education

Social Insurance- the New Function of Government

Social Security

Health Insurance I- Health Economics and Private Health Insurance

Health Insurance Ii- Medicare, medicaid, and Health Care Reform

Income Distribution and Welfare Programs

Taxation- How It Works and What It Means

The Equity Implications of Taxation- Tax Incidence

Taxes on Labor Supply

Taxes on Savings

Taxes on Risk Taking and Wealth

Taxation of Business Income

Fundamental Tax Reform and Consumption Tax

Filters

The moral hazard of social insurance as duration increases; the benefits to consumption smoothing __ as duration increases.

The consumption-smoothing benefits of unemployment insurance are _ those for disability insurance,and the negative behavioral responses to unemployment insurance are __ those for disability insurance.